SPX: weekly chart with possible EW count. On the weekly chart the things seemed to be quite clear. The wave V on the grand super cycle degree is running most probably. This indicates that within the wave III on the super cycle degree the level 2210 is mandatory. Let´s have a look on the cycle degree. What we could expect is the termination of the [3] the next weeks around 1999-2047. In this case the SPX will start a bigger correction phase which will expand some month to end Q1 beginning Q2 2015. I expect to see the first down leg in September to reach the green target area 1883-1780. Afterwards on should expect a bounce in Nov./Dec. which could develop an overshooting correction wave within an abc or an wxy correction pattern There are negative divergences on weekly and on daily level already, but still potential for an elongation up to 2000 and a bit more.
Still potential for further up. It seems that SPX is forming a double ZZ pattern within wave [v] on cycle degree. That means the SPX should not reach 2037 before breaking the blue trend line. In that case a regular impulse will be countable. In best case the SPX will reach 2020 before breaking the blue trend line. With the break of the blue trend line whether before 2020 or 2037 a correction since 1942 will start. Anyhow a double ZZ is indicating that an special impulse form is on the way to terminate on the cycle degree. We will see.
NDX is running an regular impulse. Two waves are missing to complete the main wave (3) on a higher degree. Then NDX will start a bigger correction phase and a fall back to 3784-3600 have to be considered. A first sign would be a dynamic break of the black trend line including an in-time total retracement of the last up wave. But this is story telling. On the actual time frame I expect a minor decline to the target area 4034-4006 by breaking the blue trend line.
According to DJI the SPX has to be counted a bit different. Actually the SPX has triggered the minor correction to 1993-1990.
NDX As long as the NDX trades below the red trend line there is a risk when breaking the level 4060 for a further rapid decline to min. 4043.
Thank you for your support, Baron. The US markets are less volatile after ending of the earning season. Volume is also declining. Maybe we will see some trending on Thursday because of the economic news (gross domestic product etc.). But because of less volume it is easy to shift the indices further up so that only minor correction pattern will be realized. Bulls are still strong and further waves up are still missing. No ending pattern could be assorted so far.
Spread quote 10y T-Bond versus SPX At the end of the day let´s have a look at the spread quote of Ten-years T-bond versus SPX. But not by using the indices itself instead by using the RSI of the two underlying’s. As you can see every time the spread quote arises over 1.8 or even better over 2 it has been an excellent opportunity for buying the SPX. On the contrary if the spread quote declines below 0.4 or even somewhat lower a selling opportunity for taking a short position has been near. At the moment the spread quote is between the triggering lines on the way to the selling opportunity but still a good way to go, far too high for a bigger correction move.
The NDX is discussing the mentioned support level (4060) at the moment. Below there is a risk for a further decline. The situation is deactivated if the NDX is able to reach and break the black trend line. Below the green target area is most probable.
According to what was said in posting #4: SPX reached the target zone initiated by a gap down move. The move looks like a starting impulse running within wave iii already. From the structure all the signs and hints are given. If so a further extension to min. 1988 is mandatory and a decline to the low 80ties should be expected. The situation is deactivated if the SPX is able to reach and break the red trend line or the level 1996.