Market Update

Avi Gilburt

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Looking For Resolution Lower Still Thu Oct 20th 2016

While I am still looking for this pattern to potentially complete with another drop in the market, the market has still not given us a solid indication of how it intends to set up that drop. Our primary count for quite some time has been tracking an ending diagonal for the c-wave of wave (ii).  And, it has morphed into an expanding ending diagonal if it does continue to play out.   But, within expanding diagonals, we “should” see the wave 4 still rally back towards the 2160SPX region.

Is Wave 4 Done? Wed Oct 19th 2016

With today’s continuation of yesterday’s rally, the market has the bare minimum number of waves in place to complete an a-b-c for wave 4. That being said, the c-wave is still relatively small as compared to the a-wave, which means that either this rally will continue higher tomorrow, or something else may be playing out.

Near-term setup higher still intact Tue Oct 18th 2016

The market spent the majority of the day consolidating sideways after the initial gap up this morning, staying below Friday's high so far. While I would have preferred to see more direct follow through to the 2151.50 - 2158.50 target region above under the red count as wave C of iv, that path remains more than valid still.

Corrective action continues Mon Oct 17th 2016

The market traded modestly lower today, finding support so far in the 2126 - 2120 SPX target range for wave B of iv in the red count. However, price has not yet provided us with a solid indication of a local bottom in place and the start of red wave C of iv, which would come from a move back above 2135 SPX. Assuming that price continues to follow the red count and a bottom is already in place for wave B of iv, then the current target for wave C of iv is between 2153.50 - 2161.50 SPX.

Diagonal Still Playing Out Thu Oct 13th 2016

The thing about diagonals is that they are often difficult to trade, especially if you are unsure if the diagonal is actually playing out. Our preference has been that this c-wave for wave (ii) was taking the shape of a diagonal.  But, how deep it was going to drop in this c-wave was a question, depending on extensions.  As I noted in an update today, as long as we remain over 2104SPX, the diagonal pattern will be my primary pattern for this c-wave.

Support Is Important Thu Oct 13th 2016

I am sending this out to the entire EWT membership because of the possible set up on the chart.   In the bigger picture, as long as we hold the 2104SPX region, we can still view the larger degree ending diagonal as taking shape, or even the potential of the completion of the wave (ii) in an unorthodox fashion.

More corrective action Wed Oct 12th 2016

The market rallied into the afternoon today, using the FED minutes as an excuse to pop up and tag the 2145 SPX resistance that was cited this morning. As long as price remains below that level, the more direct path down to the September low as a (y)-wave in the blue count remains valid. Under that path, today's bounce would count as a 4th wave in blue wave c of (y), now starting a 5th wave down to the September low.

Still Tracking An Ending Diagonal Tue Oct 11th 2016

With today’s drop, we seem to be within the c-wave of the wave 3 of the ending diagonal for the bigger c-wave of wave (ii), which has been our count for quite some time.  These diagonals are VERY tortuous and vicious in their moves both up and down.  And, I don’t think we are done yet.  For now, we have enough waves in place to consider all of the c-wave of wave 3 down as completed.

Market Refuses To Tip Its Hand Mon Oct 10th 2016

As each day goes by, the market continues to invalidate both upside and downside structures.  When this happens, it delineates corrective action, and often can present us within a triangle pattern.  But, a triangle in this region can be interpreted both short term bullishly and bearishly. Ultimately, the market has yet to tip its hand as to how the current region is going to resolve itself.  And, the amazing thing about this is that we have basically been in the same region now for months.

Chopping Around Thu Oct 6th 2016

If I have to maintain the current "primary" count of an ending diagonal to the downside, even if we see a completed 5 up in the move today, it can still be part of the b-wave of the wave 3 down. But, as I have noted before, diagonals are not exactly the most reliable patterns to trade, so, one should not be attempting to be aggressive in this region, imho.