Continue To Monitor 5390 For Bulls and Bears

8月9日

We are currently 1.5 trading days away from our original market top call, but this analysis will cover any new developments. Wave A appeared to have a good 5 wave structure with wave 3 having an extension. Wave B retraced 73% of wave A's movement quicker than expected. Wave C has most likely completed at least the first two waves and possibly as much as 4 waves. Wave 2 retraced around 64% of wave 1 and as wave 3 is currently marked, it extended 304% of wave 1. I have marked wave 3 based on my wave 3 indicator at the bottom. The shorter arrow pointing down depicts a wave 3 of 3 and the larger arrow depicts the end of a wave 3. The gap in the blue painted backgrounds at the bottom is the distinguishing feature of two separate wave 3s being signaled instead of just one wave 3. The retracement off of the signaled wave 3 was very quick although it was a 20% retracement and quite possibly the end of wave 4. If these four waves have concluded, wave 5 and the market could top as early as Friday.

I will walkthrough the levels on the far right first to determine a possible top. The furthest right values are retracements from the original market top from mid-July. If the index moves back to the all-time high, it would have retraced 100%. A common retracement could be between 38.2%-61.8%. The next column left of this is the movement extension of C from wave A which topped at 5336.20. Basically, wave C should finish somewhere above 5336.20 which the index has now surpassed and therefore is capable of topping at any time. The next leftmost column are movement extensions from wave 3's movement inside of wave C. Once again, we are already above wave 3's top (5333.70) and capable of ending at any time.

I try to find common levels among these three columns and monitor the index as it approaches. A 50% retracement of the macro wave 1 would occur at 5387.30, while an extension of wave A would of 123.6% is at 5393.31, coincides with a 138.2% extension of wave 3 at 5392.57. This very tight zone is certainly one to monitor for a top and it is not far away at the time of this analysis.

I try to make similar identifications in other symbols to get a better read of the S&P500 index. Japan is moving the same, although it is unclear if they have completed wave 3 of C yet.

They will most likely see more movement as their trading day gets in full swing during the overnight hours for North America. They may continue the momentum observed from America's Thursday session. Without marking their completed wave 3 with certainty, their area of commonality is between 37705-37782.

JP Morgan Chase makes things more interesting because it is not clear if we are still in macro wave 1 or macro wave 2. The case for macro wave 1 has it in a micro wave 3 of C albeit in wave 4 of macro wave 1 here:

If this holds true, the S&P 500 may not be in the correct place. If JPM is actually inline with the current wave structure as the index, waves 4 and 5 were very abbreviated based on the location of the wave 3 of 3 signals from early August. This alignment would slightly alter the retracement lines to the far right as seen here:
The area of commonality is around 211.30 which is almost too much of a movement over the next 1-2 days for this stock.

Amazon appears to fall inline with the theory of ending macro wave 2 soon.

It has a target area around 170.5-171.32 and another much higher at 175.52-176.35.

Based on the lack of obvious agreement, it is difficult to determine where the market is. I will continue to monitor the initial theory that the market topped in mid-July and has completed a five wave structure down and is about to finish a three wave structure up in the coming days. If the levels pointed out here are significantly surpassed, the market could continue upward to new all-time highs once again. Another downward reversal on or before Monday likely points to a new index low between 4100-4700 within the next month.

8月13日

ノート

We will have to see what the overnight brings and the PPI number in the morning. Based on my prior analysis, the current top was slightly early and below my suspected target of 5390. It is possible the upward movement is done, however, a "good" PPI number or calming of Middle East tensions could thrust the market higher. I am still bearish, but anything is possible.


As it stands right now the large wave B retraced 73.14% of Wave A and Wave C extended 109.396% of Wave A. Inside of this Wave C, Wave 2 retraced 64.46% of Wave 1 while Wave 3 extended 331.75% of it. Wave 4 retraced 30.80% of Wave 3. The current top would have the fifth and final wave extending 114.294% of Wave 3 which can be close to a common Wave 5 extension of 114.6%. As it stands, this second macro wave did not quite retrace 50% of macro wave 1.

Tomorrow will determine if wave 2 is over and the market is heading down, wave 2 is not finished the market briefly moves higher before reversing downward, or we are not in a wave 2 at all and the market is ready to run toward all-time highs once more.