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CURRENT MARKET TREND: Up 5/27/16 @ 2090
Stop-loss 2026

Friday, March 7, 2014

Remember the Forest

If you follow the markets daily, it's easy to get caught up in price movements that don't mean much to the overall structure of the market. I trade a little differently than other EW Theorists whereas I break some rules as long as the overall structure looks and feels correct on larger timeframes.

Here are a couple of charts from 2013 which reflect what I believe the current market structure to be.

Green wave iii topped out at 1850, which was a little higher than the mark I had on the chart, but it was still expected. I had green wave iv around 1720, and it bottomed at 1738 before the next leg higher. This chart was published on July 10th, 2013.

The above chart showed one possible path the market could take to reach the wave 3 target of 1920, which was an expanding diagonal triangle. At the time of publishing, the market was overlapping so it was a viable option at the time. Either way, the forecast was the same. Higher levels to come.

We are now getting near the to wave 3 target published. It has the ability to run up to 2100, but I don't believe it will do so quite yet. There are significant cycles aligning for an interim top in the market. We must be diligent and look to the trees (daily charts) to pinpoint these reversals.

The VIX Cycle low is due on Monday, March 10th. The Spring Solstice is the following week, coming on March 20th. The SP-500 is currently running up the the 50% fib fan line, once these lines break they are very tough to overcome. Fib Fan in yellow:

I will be on the lookout for the green wave iii high in the coming sessions, with a retrace down to 1740-1650 probable.


  1. Hi,
    Brilliant analysis. Are you marking current level as green iii and correction to 1740-1650 (or) we're heading to 1920 and retracing back to 1740-1650

    Can you please clarify? BTW I'm student of BeaconLong of EWI parters for EW coaching.

    I'm trying to evaluate several wavecounts and alternates. You're reply would help us learning


  2. I think what he means is an Intermediate wave 3 top with a retrace to Intermediate 4 (1740-1650) followed by a Primary wave 3 top.

    If his count is right, I expect the following targets:

    Int. 4 (expended flat from 1850): 1700-1740
    Primary 3 (3=1.618*1)= 2212.09

    Although his count might be right, I have several other counts that I follow. The current Feb. upward movement could be seen as:

    1) Intermediate wave B (expaded flat) of Primary 4
    2) Minor wave 5 of intermediate wave 5 of Primary 3
    3) Minor wave B (expaded flat) of Intermediate 2 of Primary 3

    Whatever it is, I expect downward movement in the medium term.

    1. Exactly. You look at the options and play the odds.

  3. kkandru - We are currently in the zone that green iii could complete any day now. The FRZ's (fib resistance zones) range from the current price up to 1920, so a reversal anywhere in this price range can occur. From the reversal I will be looking for 1750-1650 to get long again.

    On a side note, I am ultimately bullish on US Equities LONG TERM. There are two possible options for another big low in my opinion. The First option is August 2015. If the market drops into this date it should rise 10 fold into 2032. The second option is a major low in 2020, which will have the same result with a rise into 2032.

    Every long term count I have has a major rise into 2032. If this wave is the 5th of the grand super-cycle, the 2nd wave will probably bottom in 2020.

    I appreciate you guys viewing this blog. Any interest in forex, or mostly US equities?

  4. James,
    Currently I've been into EW analysis of US Equities and like to step into forex. But before that I want to master corrections as thats what forex is all about.

    I've a diff opinion on US equities bull run. Due to the deflationary trend forming , my guess is SPX head towards 400+ range by 2017 time frame , gold follows same decline too.

    Except USD, rest of the assets will collapse and by 2018 real growth starts.

    Currently I'm short on SPX using TVIX. But I'm sure there're better ways of shorting. Please share some thoughts

    Once again, your EW analysis is very easy to follow and thank you for hard work.

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