Interim Bulletin

The January issue of EWT, published on December 19, 2017, said,

Figures 108 and 109 show channels for wave 5 in the S&P and NASDAQ indexes on log scale. As you can see, there is quite a bit of room between here and the upper lines. Only the NASDAQ seems close enough to its upper line to reach it. If these indexes were to get to those lines, the Dow would almost surely climb far above its corresponding line in an outsized throw-over.

Today the NASDAQ Composite and the NASDAQ 100 indexes simultaneously reached their upper channel lines. As you can see in Figures Q and R, these indexes have been climbing strongly during January to get to this point. In accordance with the comment above, the DJIA has been undergoing an “outsized throw-over” of its corresponding line.

Figure Q

Figure Q

If the NASDAQ indexes’ channels have been controlling the extent of the bull market, this simultaneous meeting of the lines should signal the end of wave 5 from the March 2009 low and thus of the larger bull market.

Monday’s Daily Sentiment Index (courtesy trade-futures.com), which tracks the percentage of traders bullish on various markets, reported 97% bulls on NASDAQ futures, a record going back to the start of the data in March 2000. For S&P futures, the reading is 96% bulls, a record going back to the start of the data in April 1987. The 13-day average of the DSI on the S&P is 91.2%, also a record. As for weekly figures, last week’s Investors Intelligence Advisors’ Survey revealed only 12.7% bears, the lowest figure since February 1987, nearly 31 years ago. The percentage of bulls pushed to 66.7%, the highest reading since March 1986. The 13-week average of bulls stands this week at 63.5%, the highest reading since February 1977, nearly 41 years ago, when the Dow Jones Transports topped a month and a half after the Dow made a high that held for four years. On the momentum front, the 30-day average of the Trading Index (TRIN) stands at 0.88, its most overbought reading in seven years. All these indicators are consistent with the passion that typically accompanies a throw-over, as has been in effect for the DJIA since December 12, six weeks ago.

Figure R

Figure R

Most of the Elliott-wave-based time relationships in our ongoing series of EWTs projected a market top to occur at various times in the second half of 2017. The furthest-out projection accompanied Figure 39 in the issue published on August 16, 2017. It reads, “After 5 and 8, the next Fibonacci number of months, 13, added to 42 years carries to January 2018.” We are there.

Don’t look for bearish news to trigger a reversal of the trend. Bull markets tend to end not on bad news but on great news.

The reach and stretch of this bull market have made market history, and the impending bust will make market history, too.


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