SPX update: primary III became intermediate i, and major a became intermediate ii?!?!?

Going back to the major 4 low of August 28, 2013 at SPX 1627.27 we count 5 waves up. Note – though not shown- that the 5th wave at SPX 1851 was exactly the 2.000x extension of the 1st wave up, measured from the 2nd (here now shown as minor waves). Minor 1: 1627.27 to 1729.88 = 102.61 handles. Minor 2 at SPX 1646.47. Minor 5 then ideally targets: 1646.47 + 2.000x 102.61 = 1851.69. The SPX hit 1850.84… Not shabby huh!?!? Who said Fib’s and EW doesn’t work!?!? With 5 waves up, this concluded that uptrend.

Then the January retrace to down to SPX 1737.92, which is 112.92 handles, and which was clearly only 3 waves down and thus corrective.  The previous 5 waves up were 223.57 points. (1850.84 – 1627.27). Hence, the January decline retraced: 112.92/223.57=50%. Classic 2nd wave retrace target. Of note is also that the SPX then also bottomed at the 1.382x extension of Major 1, measured of Major 2 (both of Primary III); yellow Fibs. Again, who said Fib’s and EW doesn’t work!?!?

Hence, with 5 waves up completed, and 3 waves down completed of which the latter retraced 50% of the former and price then bounced (hard) off the major 1.382x extension in a 5-waves fashion, it is most logical to conclude a new uptrend is underway and that the market just experienced intermediate i and ii of Major 5 of Primary III. Big change from the previous suggested count, but we can only work with the ever newly data the market provides us everyday with: anticipate, monitor and adjust if necessary.

Can we then make projections about Major 5 and Primary III, since we have i and ii? I’d prefer to also have a minor 1 and 2, but for now we can use the intermediate waves and use the text book Fib extensions for 3rd (1.382-1.618) and for 5th (1.764-2.000) waves. Now hold on to your hats cause this may blow your socks off 😉 but assuming i and ii of 5 of III are in, then iii and v of 5 of III are projected at SPX 2044-2098 and SPX 2130-2180… Sounds crazy!?!? Well, the 1.382x extension of Primary III, measured from Primary II is at 2043 and aligns perfectly with the 1.382x extension of iii of 5 of III. The 1.618x extension of primary III is at 2207, and thus the entire 1.382-1.618 extension region for Primary III encompasses the intermediate targets of Major 5.

Need more proof, in case you think I have gone insane!?!?!? Well, remember on 10/18/2013 a Zweig breadth thrust (ZBT) was given (SPX was then at 1745): Zweig Breadth rose from 39.96% on 10/10/2013 to 65.77% on 10/18/2013 therewith meeting the “rise from <40.0% to >62.5% within 10 trading days” criteria!! After a ZBT the market rises on average ~24.6% in 11 months. This would target 1745 x 1.246 = 2174 on average, which is perfectly within the Fib-suggested SPX 2044-2207 range. And remember, the minor waves of intermediate i followed the fib extensions perfectly, so why wouldn’t the intermediate???

Last but not least, this count and targets suggest Major 5>Major 3> Major 1, which is perfectly fine within EW (as long as 3 is not the shortest wave). Given that major 3 was, IMHO, relatively short (only hitting a little bit over the 1.236x extension of Major 1, instead of the typical 1.382-1.618x extension), it is then common – and well-know among EWers- for a 5th wave to be the longest wave.

While we digest all this, the daily TIs are all long and strong wanting to see higher highs. The weekly TIs, as the weekly-SSTO-indicator, are now mostly also pointing upwards (not shown).

spx update 02152014






6 thoughts on “SPX update: primary III became intermediate i, and major a became intermediate ii?!?!?

  1. Pingback: SPX: new ATH. intermediate i and ii pretty much confirmed. | Intelligent Investing

  2. Soul, what I appreciate is you have the guts to put it out there. Same thing with your blog and your trading log, it takes guts to make a call and even more guts to show your real time wins vs losses. Whether we make it to these targets or not, it’s good to know about the potential and the fact it really isn’t as crazy (based on fibs) as it first sounds. GL!

  3. Ha Ha, “Hold on to your hats and glasses folks, cause this here’s the wildest ride in the wilderness!” -Big Thunder Mountain Railroad

    If/when this count comes to fruition, can you imagine the market euphoria? How much bubble talk we would we see? On top of that, we then would have Primary waves IV and V before the entire wave is complete, crazy. I know this is getting way ahead of ourselves, but have you continued this fib analysis and targets for where Primary IV and V (the ultimate top of this long term wave) would complete?

    • Nate – I know it’s kind of nuts, but that’s what the (text book) Fib’s based on an intermediate i and ii count, plus the (text book) Fib’s based on the Primary I, II count point at. It’s just the facts, not something I just simply suck out of my thumb. but it also doesn’t mean it will come to fruit… Although there’s a lot going for it (also since there’s some stuff that I haven’t mentioned; e.g. where Cycle 2 of SC 3 likely will end, etc).

      The 1.764-2.000x extension of Primary I, measured from Primary II targets 2300-2475… sounds even absurder… BUT, 5th waves can fail…

      Normally a 4th wave retraces between 23.6%-38.2% of the entire prior move. If we assume for simplicity sake that III will go to 2174, then Primary III is 1100 points long (since it started at 1074). So we can then expect a 260-420 point drop. Back to 1910-1750. I’d prefer the latter 😉 But now we are getting waaaay ahead of ourselves…. Let’s see what the next 2 weeks will bring; that should tell us a lot IMHO.


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