Diamond Continuation - Targets

EOD: Main take-away for today is a week-ending negative breadth print. The last one was on 2/8/21 and that produced a strong vertical tear upwards. The set up today is slightly different as readers of this blog will have discerned and no detectable termination vector parameter measurement has yet showed up for the decline so it may not be over. At best, we may have begun the pivot action near the end of this leg that began 3/23/20. Early days still yet.

3:17pm EST: Potential pivot commencement territory- not 'the' top yet. Could go 2 - 3% decline if a pivot does commence, then a bounce to new final highs. If the week closes on a decline, that would be one weekly histo bar in the red on NYAD MACD which is only a beginning at best. ES 4168.25 - 4161.75 is a measured low zone so anywhere in there most likely gets us a five waves down completion. ES 4167.5 could be all she wrote for now unless it goes for subwave [iii] down inside wave 5 down at 4161.75 zone.

Closing at ES 4166.75 or above still gives wave 'v' up (solid yellow border) a shot in this leg.

11:18am EST: Trying to sneak out the bottom or just find a new low to begin a vertical tear upwards as per usual.

10:25am EST: Could be a 3 wave move up to the diamond upper trend line area or wave 3 of 5 that goes straight out the top or some other pattern as yet unknown.

Given the market appetite right now, a continuation has an equal chance even at the depths that the various parameters are printing. Still no weekly negative breadth numbers on advance-decline (NYAD). The NASDAQ (NAAD) breadth print has a tiny negative component not sufficient to hang anything on at the moment. Most likely treading water for a few more days. Some movement towards a pivot might be expected in the ensuing weeks.

For a more detail analysis regarding how we assess a pivot action can be seen here.

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Clean Hit On UVXY Target - What That Might Mean

EOD: ES 4230 has two sources pointing to this extension calculated target.

 2:18pm EST:
Occasionally we like to see if the 'Pi' time cycle geometry has any alignments pending. There appears to be one for the week-ending tomorrow so we shall see if that is relevant by the close then [high or low print or acceleration]. Closest explanation relates to the swinging of a pendulum in an arc [circle segment] and the swing period then equaling a whole number value of the elapsed calendar days as a function of 'Pi' [in this case divided by 'Pi']. We are sure some with better math and geometry expertise could detail this general comment more specifically. It has quite often shown an alignment with price / other actions.

1:07pm EST: Five waves down counted on a three minute chart x 1% decline could be a respectable start to whatever this turns out to be. In this exuberant buying market, more confirmation than that will be required.

Original post:
f the hit on UVXY continues through the next few trading sessions, there could be negative weekly breadth prints on the horizon. For a clearer description of how that fits expectations, see previous post here.

Most likely the majority see nothing unusual in this price action. Still no confirmed top and higher prices are yet to print eventually but we remain very focused on developing parameters. Whenever new all-time highs become expected and commonplace- that will also be the time to double-down on the macro and micro parameters.

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Nasdaq Action - Second Pivot Attempt

Lower Chart: 10:23am EST: UVXY target @ 4.27 so far looks like a clean hit. A week-ending breadth decline of some value is required before any more analysis can be formulated. A 'preliminary pivot' would imply a price advance slow down / slight reversal that precludes a rollover peak printing on the summation index. The first attempt on the NASDAQ some weeks ago would be similar to a preliminary pivot though that particular decline looks more substantial in nature but it conveys the idea.

Upper Chart: A reader pointed out that the NASDAQ summation index had rolled over. The study below demonstrates how that fits with the pivot criteria we employ. Is a pivot required to create a top? The main elements do need to be present even if the pivot action is not exact every time. As can be seen in the NASDAQ chart below- some weeks prior, a deep target zone was hit [a] and there was a negative breath component that fit in the advance-decline MACD [c], but a rollover [b] did not materialize.

Regarding current weekly action: There is a rollover attempt that looks promising and it is in the deep target zone. However on this occasion, the breadth component looks insufficient. Again, there is a missing element so either a stall or a longer delay is about to occur. Even if a 'double-top' is pending, a deeper breadth histogram component will most likely still be required. In that event, the pivot structure will possibly be flat rather than looking like a check mark [somewhat like the top in late 2018].

Lower Chart: Current ES projection.

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Targets For Preliminary Pivot Action

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Nested Leg Topped - Main Leg May Not Have

3:04pm: Indications volatility is close to hitting a lower target. Let's see if there is a market decline when that prints.

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83% Potential Reversal Signal

3:38pm EST: Small wave [v] = small wave [i] at 4186.75 with an *82.4% vector ratio that most often accompanies a reversal [using parameter 4 of 4 in our calculation] so we will have to see if that was a significant print for a reversal from a high. EOD: After hours continued in a downwards reaction so perhaps the signal has merit short term. Also the vectors that printed between 4/8 - 4/15 often preclude a very short term bullish continuation followed by a slightly longer decline before resuming the upward trend. We may have had the first part. On a weekly closing basis- SP-500 and DOW closed marginally lower.

*Vector 'normal' support ratio = 50%. "Alert" signal when it hits the 81 - 88% zone (50 x fib 1.62 and 50 x fib 1.76) - which seems to be a possible best fit theory as to why this value zone continues to prove significant.

General commentary- It is noticed that some EW blog analysts more or less concur with the overall action that is currently detected [whipsaws and new highs still to come].  Reading vectors does involve analyzing complex alignments between parameters then attaching conclusions to those that have demonstrated predictable outcomes through repeated historical examples.

See EOD similar measurement previous reversal [different parameter- 3 of 4].

UVXY was used for a leveraged derivative signal in place of VXX (now VXX1) which reverse split today and did not have a symbol re-assignment valid chart yet. UVXY remained above it's 6-day lows as did VXX1. A supportive short-term telling signal. A lower target is anticipated after the pivot and summation rollover both complete. Not there yet.

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Short-Term Sideways / Down

See EOD post 'reversal' alert

3:38pm EST: Small wave [v] = small wave [i] at 4186.75 with an 82.4% vector ratio at that time so we will have to see if that was a significant print for a reversal from a high.

3:09pm EST: Another 83% vector ratio in the opposite direction using a different parameter [4 of 4] rather than 3 of 4 [yesterday] is printing at the 3:00pm time slot- need to see how it closes. It may or may not be significant since this parameter has a slightly different function

2:07pm EST: Yesterday's comment- "EOD: Vector ratio says 83% that today's low printed a significant number so could still be a re-test tomorrow a slight amount above or below that number. This leaves a higher 'head' possibility to remain on the table." Looks like the 83% call was an accurate analysis.

ES 4178.50 is a measured move price zone - could be a 'iii' up. Next target 4184 zone. Sure looks like whipsaw territory so anything can happen, 

Not sure if it will go to a higher 'head' to finish building a 'head and shoulders' - that particular pattern proves unreliable often. Waiting to see the closing numbers as there is a possibility a vector ratio in the opposite direction could print based on values so far today. Also the 'VIX crushes' pattern [4/8 - 4/15] may still require a decline beyond what we have seen so far. Best to watch for now.

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Pivot / Head & Shoulder Under Construction

After hours: Updated structure

 EOD: Vector move ratio says 83% that today's low printed a significant number so could still be a re-test tomorrow a slight amount above or below that number. This leaves a higher 'head' possibility to remain on the table.

3:49pm EST: There calculates to be a 'iii' down to 4115.25 on a 5 min chart using fib extensions. Wave 'i' down terminating at 4150 zone. This was a tricksy-trap as an expanding triangle in a right shoulder position more often breaks up not down. Probably isn't done yet. Closing will give us a clue.

1:19pm EST: Could still be an expanding pattern with a 'c-d' (typically fast / deep) leg that precedes the move much higher. We will have to see. 1:55pm OR MAYBE NOT. Pivot pattern could be trying to print- 'top' still to come.

11:32am EST: Target price zone ES 4205 or more if it is going higher. So far ES price is expanding higher / lower from 4/21 3:00pm. Likely new high yet to print.

10:50am EST: Could be expanding to print another high especially since VIX has a gap lower at 16.32 to close (minimum). Probable total of three more weeks to get anything a hat can be hung on. Tops take time to unwind selling positions in the initial stages but then accelerate right before the tipping point ('final' market high) as shown on first chart on this post.

Original post:
Definitely need more meaningful activity to complete the topping process. A pivot still has not been confirmed and that is pretty much required to complete before a final high prints- along with several other metrics referred to here recently. Looks promising so far.

If prices expand in a range around ES 4161, then a new high will most likely be imminent. That could produce a 'head' higher up. Otherwise a triangle that breaks down may confirm a right shoulder from here (or breaks up to a potential 'head' that way). Either action will be a signal. Neither means we wait some more.

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Waiting For Higher Targets on Lower Breadth

6:09 pm EST: There are good indications that a head and right shoulder may, or already have printed as some unique vector patterns are mimicking those in and around 2/16/21 so perhaps there will be some down movement after all.

EOD: Looks like the 4168 zone mentioned in 12:52pm post was a target for iii of iii or v with potentially a wave iv pullback to come next and then a wave v to complete the leg up. Probably more time needed to drag this topping operation out some. Could take a while. 

1:20 pm EST:  ES 4161.25 zone could be a target. This also closes a cash gap. Given the exuberance of investors, all we have is the data to give us a clue when tipping points are closing in. The top chart is now key to this. Whenever a disproportionate acceleration up is evident on the 50 ma (MCSUMNYA / NYAD) ratio-weekly chart (relative to price up moves on SP-500) similar in magnitude to previous tops, a new top could be imminent. Other factors also being present like a summation rollover pattern together with negative histogram bars on the NYAD weekly.

12:52 pm EST: ES 4155 - 4168 zone and above are calculated extension targets.

Actual price action may be more or less incidental (we will soon see) at this depth into targets as breadth should now become the dominant parameter assuming the interpretation of the data is accurate for the market's current status. Should be more upside to come. Still no top.

If we are in a pivot action, prices are likely to wobble with a final strike at new highs after the weekly summation index (50ma) rolls over.

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No Pivot, No Top

Until a *pivot action / weekly negative breadth accompanied by a weekly 50ma summation roll-over, most likely no top. Vectors indicate possible pullback of some sort this week but nothing more than a whipsaw. Into the target hot zone on VXX but needs supporting parameters to print otherwise just keeps digging deeper.

* A pivot action usually kicks-off with a pullback followed by a new high most often over a few weeks total. Vectors tell us what patterns to look for.

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Wall of Worry - What Does The Data Say?

See latest post here

Top Chart:
Put/call weekly moving averages: Lots of catch-phrases are often bandied around in the market analytical sphere. Sometimes they do sum things up due to repeated historical observation tied to a certain logic that also makes sense. However, it is more prudent to abandon these worn out labels and stick to reading data for better insight. For example- for many years the 'wall of worry' has and continues to be promoted as the reason for the market's climb. That is less than an objective observation even if it appears accurate in it's description of market behavior. What does it actually mean?

A simple and time-tested method of finding out more accurately is to look at the money! Where is it going and to what degree? How much worry is there in actuality? Can we measure it? Fortunately one of the reporting tools that is made available tells us where the money is going in regards to 'worry' when puts or calls are purchased one more than the other. Bottom line- money usually 'talks'. Something is assuredly happening with the 'wall' as is evident in the weekly put/call moving averages shown below.

Bottom chart:
Summation index: Cutting through the details- looks very much like a rollover on the weekly 50ma may be about to print in the coming weeks. Could be in a second system with a third yet to unfold. The 'Pi time' overlay is referencing a period of 8.6 yrs / 2. This time increment (8.6 yrs) has been well studied and used as a predictor of turning points. It is based on a number of calendar days divided by the Pi constant (3.1416) when it produces a whole round number (1000). We refer to it occasionally for reference only. It is not a primary criteria within our system but a potential supporting parameter. Note the 50ma horizontal channel that so far may contain an A-B-C pattern with the 'C' potentially about to print.

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The Incredible Shrinking Wave

EOD: Small negative divergence on breadth plus several down spikes on VIX pre-open is a strong indicator that a move is likely in a coming session. It could print a pivot point for the summation index to commence a rollover process or something else. Again with the patience. VXX spent most of the day on the first target zone of 9.79. While this is happening ES should hit some of the higher targets shown.

Having said that- there is a question of whether the conditions are premature for a summation rollover to occur due to the fact that breadth is not quite negative enough on the weekly so that needs to be considered. Perhaps a pullback of some sort needs to ensue first to create negative breadth creating the necessary divergence needed when higher prices kick in again to create a top. Sounds confusing but it's quite straight forward really- just that it is an unknown until it prints.

original post:
Some legs exhibit this behavior and it may or may not be significant other than to note it. Could it keep adding smaller and smaller wave structures or inflate again? ..sure especially since a top is still not showing up and negative weekly breadth is non-existent. Also noted- there are 7 days worth of pre-open VIX down spikes almost back to back measuring from -7% to -4.5%. It is very unusual to see that many so close together. Could be setting something up for next week. Similar behavior occurred around 2/10/2021 and set up a pullback from 2/16 thru 3/4/2021.

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Possible Fade In The Wall & Summation Index Has Potential

EOD: Closed almost at ES 4168 and certainly within margin of error. Also note that VIX recently completed 3 x pre-open 'mini-crushes' between 4/9 and today (4/15)- usually a sign that a juncture may be at hand, in this case, perhaps a small one but could be a pointer.

Update: 10:10am EST: ES 4168 has fib extension targets that coincide a) from 'DD' (wave ii low projection) and b) lower degree projection from 4/6 (small 'iv'). That zone looks like a reasonable candidate for a reaction- possibly a summation pivot point to commence. Still no top without the summation weekly 50 ma rolling over.

Also from post on 4/12: "On a monthly closing basis, there is a gap on the VIX at 15.47 that is very likely an attractant. Most likely- either a daily/weekly/monthly close needs to happen below VIX 15.47. At least that may give us another target zone we can hang a hat on for now.."

original post:

Upper Chart: Much talk for many years regarding climbing the 'Wall of Worry' and indeed that appears to be true looking at the CPC (put/call) data (weekly moving average plots). The optimism of year 2000 has not been revisited since then. Technically, it could be observed that this condition still exists and a few are outright continuing to tout a chronic 'melt-up' scenario because all are worried. Well, we like to see supporting data- that's all we've really got folks when it comes down to it. So, while we are still more or less close to the 'Wall of Worry' range since 2009, you can see a break down in 2017 commence at fibonacci '+8' years that also is a fibonacci '+13' years from the 50ma retest of the 200ma around 2005-2006. The take-away is that perhaps the wall may now be exposed to larger market corrections even if temporary. Sure looks like a possibility.

Lower Chart: Looks like the overall market is waiting on the DOW among others - they need to hit their highs. If the summation index 50ma peaks on the weekly (approx. two weeks until the peak if current status estimate is accurate)- a top could print up to 3 weeks after that. Time frame is from historical samples +/-. This behavior has been observed all the way back to 2000 so the historical reference has a good track record. Technical: note that the current MACD expectation is unclear regarding whether it rolls over or turns up in a prolonged move as occurred at the top in early 2018 in which case a good deal more time will be added to the whole process.

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Summation Index Rollover Looks Promising

If the index peaks on the weekly 50ma (approx. two weeks to peak if current status estimate is accurate)- a top could print up to 3 weeks after that. Time frame is from historical samples +/-. This behavior has been observed all the way back to 2000 so the historical reference has a good track record.  

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Deeper Into Target Zone

Pre-open 4/14/21: The closing 'volatility qualification' vector set from the previous session had the required directional sequence and an inflated VVIX (volatility of VIX) but no inflated VXX. The VXX parameter typically inflates even at smaller tops so. while some reaction may occur in the following sessions due to increased VVIX, the summation index pivot point we await may not yet be here. Analysis parameters will require watching. No sudden moves are expected that will have any lasting repercussions just yet.

EOD: Closing vectors suggest the pivot point for a summation index rollover on the 50ma may be pending. If so, the market may pull back a smallish amount and then print new highs during which time the summation index should print a peak on the weekly chart and that should put the market into position to print a top for this leg. Some criteria areas look a little premature so there may be some delay or the vector was one of a group with more to come. Either way- looks like it could be at a juncture. The summation peaks typically form a 'wobble' of one or two percent in the SP-500 while it prints a concluding high and it can take 2 or more weeks to complete. 

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Short Term Projection & Longer Target Levels Under Review

Still moving into target zones. No breadth decline of any value yet though the daily is descending and the weekly still has to run to Friday before we know if it has any intentions. Recently, it keeps printing more or less higher at week ending closes. No summation index roll over. Vectors are getting deep into 'classic' terminal zone territory with no real breadth decline so vector extension calculations may require moving to the next level in the fib ratio from 'classic' to 'long' which does occur on occasion. This moves everything further out a notch (bullish tweak). We will hang tight prior to recalculating until week ending arrives just in case there's a development.

On a monthly closing basis, there is a gap on the VIX at 15.47 that is very likely an attractant. The daily closing is currently above at 16.91 (4/12/21) so most likely- either a daily/weekly/monthly close needs to happen below VIX 15.47. At least that may give us another target zone we can hang a hat on for now as there is little else identifiable currently short term. Intra-week Bollinger Band is currently at 14.55 so perhaps that is a more realistic target zone to keep watching as it moves up or down.

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