Market Update

Avi Gilburt

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Larger bullish setup remains intact, but pullback from Jan 13th not complete. Thu Jan 19th 2017

The market sold off again this morning, forming a micro 5 down from the high. This gave us ample warning that the immediate setup higher was unlikely to materialize, and that we should instead focus on support below for a deeper wave (2) or circle 2. So far the support for a deeper wave (2) of 3 has held at 2259 SPX, but we don't have enough off the low yet to confidently assume another bottom has been struck.

Bullish setup still holding Wed Jan 18th 2017

Despite the initial drop lower this morning, the market managed to hold yesterday's low and so far has maintained the bounce into close. Therefore, not much to add yet with an inside day like this. My preference remains that wave (2) of circle 3 has completed, but if that is the case then price needs to start making its way higher to complete wave 1 of (3) and then eventually breaking out above the January high in wave 3 of (3).

Consolidation ideally close to completing Tue Jan 17th 2017

The market attempted a bounce this morning, but failed to follow through and instead turned lower into the close again. As mentioned this morning, although the futures hit the .618 retrace at the pre-market low, price may want to print that level during regular trading hours, which is what we got. With the SPX now at the .618 retrace of wave (1) of 3, ideally we can put in another local bottom here and turn up tomorrow in the start of wave (3) of 3.

Pullback likely complete Thu Jan 12th 2017

With only 3 waves off the low into yesterday's close, it left the door open for another drop in circle wave 2 which the market took advantage of today. The low struck today was near the .618 retrace of circle wave 1 and a perfect (A)=(C) from the January high. Along with what looks like a convincingly impulsive bounce off today's low, probabilities point strongly toward the start of circle wave 3 now. Under that assumption, dips may be bought using a stop below today's low.

Morning Update Thu Jan 12th 2017

I wanted to send an update to everyone about my thoughts before I began my travel today.  We are really now at a point where the market has a set up to break out to the 2330SPX region.  And, should the market decide it does not want to do so, and breaks below 2245SPX, that will make a very strong argument for the yellow count as now presented on the chart, especially if we follow through below 2235SPX, which means we will likely test the 2205SPX region.

Set Up To Run Wed Jan 11th 2017

With the lower levels structure today, but with an ugly overlapping structure, it was almost as if the market was pained to drop a bit lower to complete a wave (ii).  While the downside structure was clearly not that of an impulsive 5 wave c-wave, one can consider the downside as having completed in a WXY pattern for wave (ii).  As long as today’s low holds as support, we can maintain that expectation.

May Not Yet Be Ready Tue Jan 10th 2017

With the rally we experienced today, I know that everyone got excited that we are finally ready to break out over 2300SPX.  But, there are a number of signs that suggest the market may still need further downside consolidation before we are ready. As you can see on the attached 5 minute SPX chart, I have labeled the more immediate bullish scenario in yellow.  While it certainly is possible that wave (ii) has completed, it will need to prove that to me with a break out over today’s high.

Further Consolidation Mon Jan 9th 2017

With the market not gaping higher today, it strongly suggests that the high struck on Friday was the top of a leading diagonal for wave (i) of v of 3.  While we have the minimal waves in place for a wave (ii), I think the structure may suggest we could see further downside into tomorrow. At the end of the day, the only thing this consolidation does is open the market up to higher potential targets for wave v.

Deeper Pullback Suggests Higher Target Thu Jan 5th 2017

As I noted yesterday, the market is setting up to take us over 2300SPX.  And, with today’s slightly deeper pullback, it has set the market up in a (i)(ii)(1)(2) structure in wave v of 3, which is now projecting to at least the 2330SPX region, with the potential to extend even higher, depending upon the extensions we see in the heart of the next micro 3rd wave. So, nothing has changed in our bullish perspective.

Set Up To 2300+ Wed Jan 4th 2017

With the market completing 5 up yesterday, and today taking out the .764 extension of the (1)(2) structure up, it makes it likely that we have begun our next trek to higher highs.  Based upon the current set up, it seems we should be on our way to at least the 2310SPX region, with the potential to still exceed 2330SPX, all depending upon extensions. As noted yesterday and today, it would take a break of last Friday’s low to make me question the current wave count.