Technical Laboratory Update For The Week Of September 4, 2016

For our U.S. subscribers, I hope your holiday weekend is going well, and for non U.S. subscribers, be aware that the regular trading hours are closed for Monday, September 5.  Based on the preferred Elliott Wave Path that was outlined at the beginning of August, the market continues to track exceptionally well with marginally lower lows being put in place each week.  Fourth waves in Elliott Wave are typically complex in nature and to add to the complexity is the inherent choppiness found in rising wedge/Elliott Wave Diagonal structures.

SPX

SPX

Seasonality continues to point to weakness via the four year election cycle.  This cycle is only taken every fourth year and averaged out over a 100 year period.  The tandem chart is the average market performance over 111 years of DJIA history on a single year basis.  It becomes very apparent when viewing them in a comparative fashion that the seasonal weakness tendencies double up during this time frame which adds confidence to the assumption price regression.

Seasonality Comparison

Seasonality Comparison

 

Timing wise via MSP, it is looking for an upward bias this week and which may have actually started a little early considering the price action that we had in the latter portion of last week.  While overall weakness is to be assumed as a function of the long duration seasonality, near term strength needs to be respected as a function of MSP.

MSP

MSP

Ultimately expectations are still very much aligned with our assumptions that were made at the onset of August.  Price has not advanced in any meaningful way since the 2191 target was achieved and expectations for overall weakness from the latter portion August through till early November are very much on track with new lows being set during each weekly trading range.  Best to your trading on this shortened holiday week and we look forward to seeing you all in the lounge.  Trade safe.

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