SP500 E-Min Index Review: Getting Down To the Wire!

The index only moves during the day with some of the wild moves smooth out a bit more.

The recent bullish price surge is getting down to the wire as there is very little room left before the SP500 breaks out to new record highs.

There is also an open gap which should get closed off, but ultimately this wave count has to decline and take out multiple support price levels around the 2830 price level.

They keep talking about a recession but this chart is still at record highs. Record lows would be better as when that happens we know the recession will be over.  2008 was a good recession year reflected by the charts with massive insider buying.

If, we don’t get a significant correction by the time solar cycle 25 is in full force a new bull market should start.

Upswings in solar cycles are very bullish for stocks which could happen by early 2021.  In the next few months, this SP500 would have a long way to go as it has to clear the bottom of my “A” in Intermediate degree.

The Gold/SP500 ratio is sitting at record highs at 1.96  just off the 2:1 expensive ratio I have recorded.

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SP500 E-Mini Intraday Gyrations Update

Between the 5 indices, I generally watch, each one has a slightly different pattern and in the case of the SP500, I have one small zigzag that doesn’t fit as well as I would like.

At the 2895 price level, we have several previous 4th wave peaks which also have some spikes in them.  Draw a line across the 2895 price level and we also have an H&S pattern which could also be very bearish. In a bull market that right shoulder would never hold but when investors are in a bearish mood, that right shoulder will just keep on crashing.

It’s a full moon today so next week could end up being a wild ride indeed. What else is new?  I would rather see some fast action than when the markets are in a sideways pattern.

Either way longer term I’m bearish, but nothing can stop a wild counter rally when we least expect them.  A Minor degree wave 1-2 can work but a surprise rally produced by a stock bull attack sure can create a ruckus.

The commercials are not that bearish so this leaves it wide open for moves in both directions.

The Gold/SP500 ratio is at 2.26:1 and it’s been hitting this 2:1 ratio brick wall since May 2018. Longer term we may end up close to a 1:1 ratio but it will take a long time to get there.

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SP500 Intraday Gap: How Long Will It Stay Open?

Last night the SP500 imploded, creating a huge open gap in its wake. The big question is, “When will the gap get fill”? If I was very bullish then chances are good that this gap will get filled this month but if a bigger bearish picture is emerging then this gap could stay open for many years.  For now, I think the gap will remain open but not all indices produced open gaps.

We have many different tops with the SP500 at the 2960 price level producing a great looking double top as well. If the gap stays open by the end of this week then the gap could hang around for a long time. The gap will become important far into the future, but then the majority will have forgotten about it as well.

The Trump tweets caused this gap as at the same time the VIX exploded. Just goes to show how Social Media can damage a so-called bull market.

Social Media is  “Mob Rule”, as emotional investors decided to unload after the tweeting action of a President!

What this move did show is that the Gold/SP500 ratio hit 2.3:1 this morning which is the second most expensive Gold/SP500 ratio since September 2018.

 

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SP500 2011-2019 Weekly Chart Review

This is the weekly chart of the June SP500 contract. Our present 2019 stock rally is about 43 points from breaking out but even it stays at the peak today, I will try my extended wave count.

It was the 2011 bottom that is important as it matched the “Peak Gold Mania” of 2011 as well. The other big event that happened at that time was that solar cycle 24 hit its first peak in September 2011.

Basically, I extended the Minor degree part which makes the 2015-2016 correction a wave 3-4 bear market. Since then this market just doesn’t want to stop, but I think resistance is building up. In the last 15-16 months, we are looking at a potential triple top.

The present top also could produce a “Right Shoulder” which if the SP500 is very bearish, the markets will not blast to another record high.

The hedgers are no help at all as the commercials only have a very small net short position.

On a daily chart, the SP500 is still in a golden cross position, but a good correction can produce a death cross with little effort.

The 4th wave bottom support in late December 2018 is also where the 200-day MA is sitting. In order for the SP500 to hit the 200-day MA again, the entire 2019 bull market must eventually be completely retraced. That would put the SP500 below the 2300 price level.

I use the Gold/SP500 ratio and it is always a good idea to make calculations when the markets approach record highs. The record expensive ratio was 2.41:1, with today’s calculation coming in at 2.28:1.

 

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SP500 Daily Chart Review

The market bottomed in December of 2018 and has now been in a bull run that is a bit more than 3 months old.  2940 represents the potential for a huge double top, and a major Head&Shoulder pattern as well.

We have about 60 points to go before the SP500 runs into new record highs. This remains to be seen, in the days or weeks ahead of us. The entire 2019 market rally is very straight with no real corrections in it.

The corrections we did get are diagonal waves and could be an ending to a “C” wave. Now is also a good time to calculate a Gold/SP500 ratio which means little, if we have no database to work with. Not too many take the time to make a few calculations per month, or when faced another potential extreme.

Since September  2018 any 2:41:1 ratio would be expensive when using the gold cash price, this morning the Gold/SP500 ratio was 2.24:1. This is not a record but very close to being very expensive. A cheap Gold/SP500 ratio would be closer to .75:1

Just with those numbers alone, It’s hard to justify looking for another superbull stock market to materialize.

The Golden Cross happen at the 2760 price level which is very bullish, but always lagging in time.  This doesn’t mean that the golded cross will last as the markets can reverse just as easily.

The first Friday of every month jobs report and a full moon could produce another turning so anything can still happen in the short term.

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Mini-SP500 Weekly Chart Review

While the majority of investors are pushing the SP500 higher, I’m building the bearish picture.  Most of the bearish pictures I can draw do have multiple choices most of the time. 8 choices would be normal and constantly eliminating anything that will not fit is the name of the game.

A near vertical move with barely a correction could work well as part of a wave 1 pattern and the mainstream analysts are foaming at the mouth in how bullish this setup is.  To confirm the bullish scenario the SP500 would have to continue to soar to much higher price levels, otherwise, we are being blinded by a bunch of smoke and mirrors media news.

There are lots of bearish moves just like this and most of them were fully retraced.  This weekly chart has pushed the SP500 past the 50-day MA, with the 200-day MA still being far below present prices.  The short story on that is that the death cross on this weekly chart is in our future as we are still under the influence of a golden cross that happened in 2009-2010.

Price wise the SP500 must crash well below any support we see and that is before the 200-day MA gets hit.

I’m sure that will happen as flogging a tired stock bull will eventually just piss it off and they could flee in all directions except up.

Commercial traders are not that skewed to the bearish side but bearish all the same.  This also tells me that their positions can change rapidly which will happen once the SP500 gets into another oversold condition.

The Gold/SP500 ratio tells us another story as this morning it was 2.16:1.  We are still very close to a record Gold/SP500 ratio high, so there is nothing that I would consider cheap when compared to the gold price.  In order for the SP500 to become cheap again we need to go below a potential 1:1 ratio or even lower.

 

 

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SP500 Daily Chart Review

The SP500 and other indices wave positions I had have now pushed further that I would like to see, so changes have to be made.  This 2800 price level has been hit for the 6th time this year alone, so it will be critical to see how long this bullish move will last. Even though this stock rally looks like a real impulse wave, there have been many like this which have been completely retraced. Gold is just one example.

The commercials are not skewed that much to the bearish side so that adds to the uncertainty to this bullish phase, in the short term. The Gold/SP500 ratio helps as it is at 2.10: this morning. This is still about as extreme as it gets as my last extreme was 2.41:1 back in September of 2018.  We also have one wicked H&S being set up and in a bigger bullish phase, the right shoulder will not hold.

Market players are always waiting for something to happen that will paint a bullish picture, like the trade talks. Fundamentals change like the wind and basing investment decisions on the words of a politician usually never last as emotional investors can interpret any news a thousand different waves. There are many contradictions made by the mainstream analysts and that alone is enough to take pause to see how long this bullish phase will go.

HEDGE decline to new record lows which makes it out of sync from the SP500 index by a large margin. HEDGE has far more “slippage” in it than I originally though, which makes it unsuitable for a long term investment/trade. When there are options inside an inverse ETF, I would not waste my time with it, so I will no longer spend my time wave counting out HDGE. Besides that, if HDGE  ever got closer to the $5 price level, an inverse split can happen. A normal inverse split can be a 4:1.

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My updates are going to be erratic and reduced this year. I will post updates on my page.

https://elliottwave5.com/elliott-wave-5-0-possible-status-change-in-2019/

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SP500 Intraday Update

So far the SP500 is keeping its bullish trend while the VIX created a huge decline.  I have only one trend line which the SP500 is starting to cross or roll over. Any bigger dip will help confirm that the SP500 could be losing it’s power, as buyers take a rest. Markets are just big auction sales which always gets sold to the highest bidder and I see the markets reacting the same way.

I can’t get a correction out of the VIX as it looks like 5 waves down. I’m sure the VIX will crank up again as the VIX could be on a “C” wave decline.  All this might still take the rest of the week to play out, as little choppy waves stretch time. US government shutdown has killed any COT reports and once the government gets up and running again, we could get a COT “Data Shock”. My last report will be a month old by January 20th so positions could make dramatic shifts when it gets released again.

The Market Vane Report I still get is a private report, which shows that 47%-48% bulls were present all last week. There are still too many bulls around to keep fueling this bullish phase for another major leg up. Our 24 month high was 73% bulls, which is not as extreme as it can get, but enough to kill the stock bull. The basic logic is when the majority are bullish then who is left to get in. Is it a tribe that just came out of a cave or just another greater fool chasing a bull market? FOMO is a popular bull trap

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SP500 Rally Death Cross Review

 

So far the stock rally has performed in the last part of November, but that doesn’t mean it can’t stop on a dime and reverse. So far the counter-rally was a little more dynamic than what I  expected but it will still fit as a bear market rally.  This year we have had about 5 bottoms at various price levels, and if the bigger bearish picture is real then there is no chance that any of these bottom prices will hold. Prices rarely ever hold for very long but a good wave count bottom can.

Sure we could see this move turn into a year-end bullish party and we have to wait and see if this becomes the case. The Gold/SP500 ratio is about 2.25:1 this morning which is still about as expensive that we can get.  One ounce of gold can only buy 2.25 units of the SP500, so we want that number to spread as stocks become cheaper. Just because they did get a bit cheaper doesn’t mean a bull market can keep it going.  Another super leg up is pretty hard for me to accept as nothing is oversold from my Cycle degree perspective.

 

 

I applied the 50-200-day MA lines to this daily chart when the 50-day MA is going to cross the 200-day MA, which they call a “Death Cross”. Investors should never ignore these crossings but I know most of them to do, as they are fundamental analysts first.  The 50-day MA can now supply resistance, so combine that with the “Death Cross”, we have a very bearish situation going into 2019.

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Mini SP500 2016-2018 Review

 

I’m sure the entire planet is trying to figure out how far or how deep this bear market will go. Most of the time markets will come to a grinding halt at some previous bull market support. In this case that would be the 2016 low. (2000-1800).

I will also keep my expanded pattern alive as it is already telling me that one day, all the markets that have this pattern will get retraced in another bull market, but it may take 10 years or more before a new record SP500 high will ever get recorded.

I have mentioned many times that all the President Trump market gains will burn up in a puff of electronic smoke.

From the 2016 bottom we had a 2-year run to complete a move in Intermediate degree, so when the market retraces back to those levels, they would have retraced an Intermediate degree move. Since it would end with a run of 5, I always have to cap it. If I see “any” 5th wave uncapped, then I know those wave counters don’t have a clue where they really are!

This would be the “A” wave in Primary degree and “A” waves are usually “Buy” signals, but they are not the starting waves of a new bull market.

Any “B” wave in Primary degree will also be very choppy, which will be the first clue that it’s just another bear market rally.

It may sound crazy that the SP500 will crash down to the 1800 price level, but we are dealing with a Cycle degree bear market, the likes we have not seen since the 2009 lows.

Tech companies inside the SP500 are imploding with Facebook, Apple, and Nvidia leading the way. This should not be a surprise to any serious market observer as this is starting to happen for the third time since the 2000 tech bubble. Three bull market peaks have blessed the smart market timer, but those party days are over, at least until after 2022.

Solar Cycle #25 should kick in so the younger investors will enjoy the power of the sun. In 2008 it was Solar Cycle #24 that kicked in and it supercharged the markets until January 2018.

The Gold/Sp500 ratio has changed little and is on the expensive side of 2.2:1.

Some say there is no place to hide from this turmoil, but we also “always” have a choice. Any investors that are getting close to retirement should be extra cautious, as my generation got hit hard, and escaping into cash would have at least saved some capital gains.

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Mini SP500 New World Records!

I normally take a break on any US or Canadian holiday, but occasionally I will break that rule. Soon we will be starting in the third year of a single 5th wave in Intermediate degree. At this time the markets show no signs that they want to slow down, but reversals can happen coming as a complete surprise to the majority.

We can’t have our noses stuck in the intraday level as we always have to look at daily and weekly charts on a regular basis. At the monthly chart scale we are dealing with a vertical move, where we can barely see any of the corrections above. On faster moves we can’t see any corrections on the bigger scale. Extensions happen all the time as they are a fact we can’t deny. Just because we have a single tall 5th wave, doesn’t mean we are jumping into higher degree levels.

We are still in the running to a Cycle degree wave 3 top, so until that happens, I will remain extremely bearish.

Tomorrow will be a new moon date, which can produce amazing reversals, when they feel like it. It could still take until the end of the month for this to play out, but I look at mid week times as potential turnings as well. The longer and higher this goes, just means it has much deeper to fall when the next bear market arrives.

Crude oil may crash along with the stock market, so we have to be aware of that potential situation as well.

Today the Gold/SP500 ratio is still around 2:1,  which it has been for 3 months. When a ratio is at an extreme and it seems to be stuck there, then I look at it as a warning for a major double top in the Gold/Sp500 ratio. In the end, we want to use less gold to buy a single unit of the SP500, which is close to,  (.75:1) Not until we get close to this cheap ratio again will the markets become oversold again.

Here’s what could trigger a 30% stock-market melt-up, says investor Bill Miller – MarketWatch

The markets breaking all these record highs are starting to bore me to no end! 🙄  Enough already! It sounds like the market analysts are stuck on repeat, or they are getting creative in calling for another melt-up.  It’s amazing how they can call higher and higher bull market targets when they didn’t even see the bull market coming back in 2009.

The higher calls mean nothing in the big picture as nobody knows what the markets will correct down to once those targets have been hit. Nobody is saying, ” Oh BTW, once SP500 reaches 2800, then expect a correction to 700″! Identifying bull and bear markets “after” they have turned means nothing in the big picture as the herd is always late getting in and late getting out.

Forecasting big price moves means the fundamentals are going to change as well. This is why, “fundamentals will always tell you the wrong things at the extremes”.

I’m sure that at the next bear market low, we will see dramatically different fundamental news come out, and I will be very surprised if we are not in a recession as well. I mean a recession, not a depression!  When all the analysts are in consensus agreement that a recession has arrived, it will be over. A new bull market will start again and eventually move 500%, not this boring 400% 5th wave move, we are presently in.

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Mini SP500 Intraday Record High: Shooting For The Moon!

Once again the markets have pushed to a new record high this morning, peaking at about 2609 so far. 2610 could be within reach after which I expect another correction.  We need a much bigger correction than what we’ve been getting. We need a correction so big, so there is no hope of any recovery in 2017. At a minimum, we need the markets to retrace back down and below, the early November low. This might be far enough where any wild counter rally will no longer break new highs. 

The Gold/SP500 ratio has not changed that much, and it has been hovering around the 2:1 ratio for most of November. It seems this extreme ratio has been hitting this  2:1 brick wall, which is what I would like to see with other ratios when they become due as well.

The (.75:1)  ratio makes the SP500 extremely cheap, which means it takes less than an ounce of gold to buy one unit of the SP500. 

The return to “cheap” stocks will not happen overnight, as we have to be prepared for the long haul, until 2021 if need be. 

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Mini SP500 Intraday Record High Review

The markets have seen another impressive run for most of July, with the SP500 topping to another record high. Early yesterday the Mini SP500 reached 2476 before it turned down again for the rest of the day. One move has ended and another move looks like it has started. Two main things can happen next, one is that another correction of the ongoing bull market has started, or that a big bullish phase has ended. 

Now if this start of the decline survives the day, then this would be a good thing. In the end, for a bigger bearish move to have started, we need to see these markets head much lower. I’m not going to go wild in calling this an expanded top due to the fact, that there are  just too many zigzags. Besides, not until any “C” wave decline has nearly finished will we know.  

A potential Cycle degree wave 3 is still my favorite choice, but only time will help to confirm that. It’s also time to take another Gold/SP500 ratio calculation, and as of this morning it takes 1.98 gold ounces to buy one unit of the SP500. When the SP500 becomes cheap again, this ratio could be closer to  .75 of a Troy ounce. Not until the entire planet is bearish on US stocks, will this ratio give us better readings. 

As I post, the SP500 is heading up again, but we want to see the top price of today hold.

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