Monday, June 12, 2017

Gap Down, then Almost Gap Fill

The S&P500 gapped down at the open today, and traded lower to 2420. Unlike the NQ futures, which made a new daily low, neither the ES futures, nor the Dow cash, nor the S&P500 cash made a lower daily low today. Instead they went into a very choppy sideways movement until 1 PM ET, then drifted higher, and almost filled the opening gap at the close, but just didn't have the gas to do it. The S&P500 closed down -2.38, and futures volume picked up quite a bit as contracts began to roll over from June to the September contract.

It is possible the S&P500 is trying to extend a bear-flag correction, as in the chart below, with a double zigzag count.

SP500 5-Minute Bear Flat Extending

You'll note the down wave on Friday took 42 bars, and from a time perspective, we did not even reach 42 bars until mid-day today. So, if the correction finishes properly, it would make an outstanding wave for a second wave, because corrective waves should be longer in time than their impulses. Whether that wave will be 2, or B is undetermined at this time. We don't know if an impulse or a diagonal lower is forming just yet. Regardless, the point change was rather minimal.

We sort of anticipated that (being Monday), and so over the weekend, we prepared this monthly count on the London FTSE-100. We will present that now, and hope you enjoy it.

FTSE 100 Monthly

Because of the following three factors, if the London FTSE is also in Primary 5, it looks and counts much more like a diagonal than the US Indexes do (at this time). We have counted it this way for three critical reasons. They are below.

  1. Overlaps
  2. Length of wave (2), depth of Elliott Wave Oscillator (AO) at the point of wave (2) is deepest
  3. The Elliott Wave Oscillator currently diverges at the highs
Again, we are just trying to use objective criteria to reduce guessing in the count. We hope you approve.

Thanks and have a good evening.


  1. DOW count will need some readjustment

  2. Let me guess. The b wave is actually a 3rd waves. EW analysts really must hate these b waves