Once I questioned if the market had made a larger top or not two weeks ago (see here and here), the market has been following a nice impulse structure up to new All Time Highs (ATH). I’ve therefore been able to forecast all it’s micro highs and lows to the T, which we, and my premium members who day-trade, have profited handsomely from 🙂 See my most recent daily market updates here.
However, now it is time to become more defensive as at this stage it is unclear if all of the larger wave-3 is in, or if we’ll see one more push higher after an ideal drop to SPX2461-2451 for a small 4th wave, to be followed by a last and final small 5th wave to our ideal SPX2485-2505 target zone as based on Fib-extensions four (!) different wave degrees point to this zone for a larger top. The hourly and one-minute charts below show the two aformentioned counts we now track:
Figure 1: SPX hourly chart. Preferred count: minute-iv of minor-5 underway
Figure 2: SPX one-minute chart. Alternate count: minor-5 of intermediate-v of major 3 topped at SPX2478.
In fact, the largest wave degree’s 1.618x Fib-extension has an exact top at SPX2478 for wave-3, which was struck to the T this week. Thus caution is advisable. For now, however, all charts we track are bullish, all indicators are on a buy, all Simple Moving Averages (SMA) are pointing up, price is above all (5d to 200d SMA) all Technical Indicators (TIs) are on buy and pointing up, market breadth is positive, etc. Thus, the charts tell us to continue to look up, which is perfectly in line with my preferred wave-count.
Taking a step back, I want to remind you that I carry two big-picture counts:
- preferred count: points to a large market top in spring 2018 followed by a multi-year bear market. This count is supported by larger timing cycles, such as the Benner-Fibonacci cycle, which forecasts a market high in 2018 and a market low in 2021.
- Alternate count: has a one-degree lower top in 2018 to be followed by one more push higher into 2019, which fits with the Carolan 16-20 Year Cycles.
Staying closer to home, my short-term Fibonacci-based timing/trading interval has a turn date slated for August 8, whereas my intermediate- and longer term intervals coincide August 3. Note these intervals have correctly timed most of the market highs and lows since the August 2015 high and February 2016 low. Hence, it appears early-August could mark the time for the top we are looking for. This would fit well with my preferred count of one more push higher (into that time frame).
Figure 3: Fib-based short, intermediate and longer term timing/trading intervals.
Please note there’s no need to front run anything yet as 4th waves are difficult to track and trade: they can do anything they want. Also remember this is a bull market and the minute- and micro-waves can extend: while all wave degrees point to SPX2485-2505 the market can go beyond it. No guarantees, only probabilities of possibilities. Hence, already starting to aggressively short in anticipation of the upcoming 4th wave is not advisable, and shorting a 4th wave is not for the faint of heart with it’s many twists and turns. Once we have a confirmed larger wave-3 top, I can then determine downside targets for this 4th wave.