E-wave

From my first Elliott wave post in March 2016, I have been pointing to ideal SPX top 2250-2500 Q2 2017 to Q2 2018. 

I recently expanded the idea to list price and time targets across USA main indexes in a Larger View post here. 

Amazingly all 61% price targets have been met so my conclusion is - higher! 

I first posted a weekly chart dividing into a similar 5 wave pattern back in June:

And refined recently as this (as a stronger way this could play out).

Updated chart here. Lines are very approximate. It is the overall pattern that interests me. 

Anyway, current E-wave status is:

Monthly chart W5

Weekly chart w3 subdivision of W3, meaning this is the best portion of the move because this can run a while; then we see w3 end, w4, w5 all to complete W3; a larger weekly W4 that matches W2 drop, then a final W5 that will complete the monthly pattern.

Daily chart made a complete W5 up and very time extended ABC down into 11/4 low, not is in process of another 5 wave up pattern. One can debate daily chart count (there are always other counts, which is why I don't do Ewave too much) but I don't think we have see a real 4 yet. 
 

China tech

I know, China is about to crash right? Here is some news for you: Shanghai Comp already crashed -49% from 2015 high to January 2016 low, and since then quietly rallied 25%. 

Here's an idea - if USA tech gets laggy then maybe China tech will takeover as a sector-like leader. This is pure theory at this point, since some key China tech names have weaker pivot status than QQQ. Because we should compare apples to apples, let's stick to ETFs instead of stocks. The highest volume is KWEB and it has the big names: Alibaba, Tencent, Baidu, etc. 

Repeat, not a trade rec, this is larger view idea for a theme we may see in 2017. At this point it is somewhat like this post on rates, bonds and financials in August, which was an idea about sharply rising rates. Although I had recommended TLT as a speculative short right at the highs, the real official TLT short signal along with clear XLF out-performance came more than 6 weeks later at the beginning of Q4 in early October. 

Sum
No hurry to enter here with KWEB below Q4P and DecP (medium term weakness) while QQQ still holds above Q4P. Thus far China tech has dropped sharply off early October highs and lower since the election. If YP breaks then I will put this idea on a shelf and not take it off until recovery, and even then we'll soon have 2017 pivots in play. But if QQQ breaks Q4P and KWEB holds its YP then pivot status is roughly equivalent and I'll keep an eye on it. 

KWEB W
Not so impressive below falling 20MA, rising 20MA; still above flatish 50MA and 100MA however. This chart is basically sideways and range bound since 2014. 

Comparing to FXI from 2014 in red, mostly the tech companies have outperformed with brief period during the massive China rally in 2015 1st half. 

Moving to a daily chart from 2016 2H, tech was outperforming but now not really. 

KWEB W
Standard long term pivot chart here with high on 2HR2 and back to test the YP. If long I would not have confidence that it holds since already tested. 

KWEB D
This is more of a toss up with YP test on RSI divergence. 

Lastly I really have no idea how much currency is impacting the range on KWEB. Here's CNYUSD from 2014, -12%. This means theme could be right and KWEB might not be the best vehicle. 

Larger view, refined

Per the recent Larger view post, I think markets are in a W5 euphoria stage that will be the final portion of the bull market that began in 2009. It would not matter to me who is president. This is based on the structure of the movement from 2009 on SPX and other main indexes. As it turns out this structure is matching the theory so well - first move strong rally, resistance, acceptance for the longest and strongest portion, doubt, and finally euphoria that is so evident to me on quarterly and monthly charts. 

There are more bullish perspectives - some say the bull market really began in 2013 with the SPX breakout above the 2007 high. By this count, the bull is only yet 3 and has many more years to run. Regardless, if all USA main indexes are above yearly and half-year pivots I will still be bullish. And my own ideal high zone has 6 to 16 months yet to play out. 

Yet if we are in a W5, how might this unfold? 

The most bullish fashion would be an "ideal" 5 wave pattern which means W1 up, W2 down, W3 that subdivides into 5, W4 down, W5 up for the top. Even that may have some range bound distribution period before and ABC down becomes evident. This would bring the market towards the higher price and longer time duration targets and would look something like this on a weekly chart.

As with fractals, similar patterns repeat so it is completely philosophically consistent to see W5 on a monthly timeframe that appears to be one larger move play out in a 5 wave pattern on a weekly timeframe where the divisions are more evident. 

Or a less strong pattern would have W3 of a less duration and power but still sub-divide and look something like an ending diagonal. This would still take the  market towards the medium price and time targets above 2300 near 10/2017, like this:

A weaker pattern could stop anywhere in the 127% to 161% retracement targets of the last move, so 2225 to 2335, and make some other pattern like head and shoulders, double top, lower high, before rolling over. But I am not really an expert on patterns so all this FWIW. 

There is a lot of optimism right now on what Trump is going to do for companies and Wall Street. There was quite a lot of pessimism when Obama began and it seems like the total opposite. But who knows, maybe the market makes a major top in March or April of 2017 and does not look back for many years :)

Larger view

On March 19, I wrote my first Elliott wave post calling for ideal SPX high to occur at "2250-2500 Q2 2017 to Q2 2018." This was valid as long as INDU stayed above its YP, which is has every single trading day since then. 

Here is the chart from that post. No rewind on data feed! SPX close 2049.58, let's say 2050. 

Here we are now, let's say 2200 (7.3% higher).

The larger view is that I keep to this idea. The market is making all the moves it should - after an extended (W3) advance, when all agreed the world was bullish, the market consolidated, created doubt, and chopped people up for 18 months in a textbook W4 pullback.

Now we are seeing W5 euphoria. The Great Rotation out of bonds into stocks is finally here. At long last the banks are joining the party, QE is over, ZIRP is over and the market doesn't care. How long does this TrumpIt bull last is the key larger view question. But I don't mean to sound an immanent alarm. Monthly charts on the main USA indexes are massively bullish here and path of least resistance is higher - even if the market starts to stall which would be totally normal after an amazing two week run. 

Actually, we can do the E-wave exercise across the USA main indexes and calculate 61-100% W1=W5 targets in price and time. The more that line up the better. We might see the stronger RUT do 100% and INDU do 61% or something like that. I will still use the pivots for fine tuning. 

SPX 61% price = 2240, 78% = 2360, 100% = 2510
SPX 61% time = 6/2017, 78% = 10/2017, 100% = 4/2018

INDU 61% price = 19460, 78% = 20560, 100% = 21965
INDU 61% time = 5/2017, 78% = 9/2017, 100% = 3/2018

NDX 61% price = 4750, 78% = 4985, 100% = 5285
NDX 61% time = 6/2017, 78% = 10/2017, 100% = 4/2018* (using 3/2009 anchor)

RUT 61% price = 1265, 78% = 1355, 100% = 1465
RUT 61% time = 6/2017, 78% = 10/2017, 100% = 4/2018

VTI 61% price = 115, 78% = 121.25, 100% = 129.50
VTI 61% time = 6/2017, 78% = 10/2017, 100% = 4/2018

Note NDX and RUT have already exceeded the 61% area targets.