Wednesday, June 14, 2017

DOW New High - 2

Today, being FED day, the powers that be raised interest rates again, and began to tell us detailed plans for balance sheet run-off - all dependent on incoming economic data, of course. The Dow Jones Industrial Average made two new higher highs today and closed at 21,374. Where have you heard that number before? Well, it's the projection of C = 1.618 x A that appears in my February 26, 2017 YouTube video on a plausible Dow count that incorporates the fact that the NYSE advance / decline line was recently still at an all-time high. See the second chart below for an update.

Yesterday, we showed you a potential ending expanding diagonal on the Dow. The measurements there have already provided that an ending pattern is possible: the dreaded megaphone measures precisely in every detail following the standard rules and guidelines of Elliott Wave. Yesterday, we stated during live chat, "watch out here because these can get quite aggressive to the upside". And what do we have today? Higher highs on the Dow.

And, how about that S&P500 cash index? Whoops. The devil you say? No higher high today? Well, we showed you a possible ending pattern on the S&P500 2-hr chart, yesterday, and it appears to be getting better defined today. Here is the chart updated from yesterday.

SP500 2-Hr Chart : Potential Contracting Diagonal

Yes, price is still in the channel, but it is trading in the lower half of the channel. That is a signal that prices have currently lost some momentum, and a diagonal may be forming in this index.

Because the exact Fibonacci level has been hit today, it is important to show you the continuing count on the longer term Dow to this point in time, using the two-day chart.

DJIA 2-Day Chart with C = 1.618 x A

I know a lot of people are getting hyper about the length of the (b) wave in the S&P500 Index. One has to remember that index has a lot of representation from the once high-flying NASDAQ 100 stocks. (I say once because today the NQ could not even trade above it's 18-day SMA). Yet, the (b) wave absolutely does not look out of proportion on the Dow.

I reserve the right to say two things. First, the (b) wave up may not be over yet. We know that because there is nothing that says the Dow has already completed it's expanding diagonal. And there is nothing to say the S&P500 Index has completed a diagonal at all.

But, wherever this upward wave ends, I also reserve the right to say that Minor C of Intermediate (1) has ended here (as an alternate) in a wave that simply did not follow The Eight Fold Path Method upward. This would be exactly the same count as in the weekend video on YouTube.

But, it would be best if minute wave ((iv)), circle-iv, ended back on the lower channel line, in the area of prior minuet wave (iv) in terms of following The Eight Fold Path Method. So we will allow for that - especially since the waves would have a better look.

From the perspective of The Eight Fold Path, we have wave (iii) of minute ((iii)) on the peak of the Elliott Wave Oscillator, and wave (v) of minute ((iii)) on a divergence. We also have minuet wave (a) down on a wave in which the EWO goes below the zero line, and this would place wave minuet (b), up, on a divergence.

We'll see how this goes, and whether the Dow wishes to attain the lower channel line. Regardless, now is the time to remain alert and flexible. It is certainly possible that a gap up could help make the blue C wave shown on the S&P500 chart, and help make wave (3) have that higher high needed for a diagonal. Please note the labels on the S&P chart are for ease of illustration only. The Dow chart has the correct degree labels.

Have a good evening.


  1. I've been watching that 21,374 level on that February video over and over since you posted it. It keeps me grounded as to where we are as I a get a little lost in the lower time frame counts. Thank you for your daily or almost daily posts as it keeps me "patient and flexible" as you like to say.

    1. Welcome, Rose. The short term is the messiest I have seen it in my life. After years and years of Elliott Wave experience if it's difficult for me, imagine how difficult it must be on the newbies! I do hope people don't giving up trying to learn. It will get easier.