Elliott Wave Analysis of the S&P-500 (SPX) by Sid from ElliottWavePredictions.com. Click on the charts twice to enlarge.
Many, including myself, have been counting 5 waves up from the November 16 low, and have been expecting that that would be followed by downward movement. Then yesterday, a very slight new high appears to give the rise from November 16 seven waves. The interpretation shown above, which features a black (intermediate) degree triangle from May 4 through November 16 of last year, provides a very plausible explanation for yesterday’s slight new high.
If the wave count shown above is correct, the entire upward movement in the US stock market this year is a terminal thrust from a triangle. This would make a lot of sense, as TV pundits have been proclaiming that this market “just won’t go down”. Thrusts from triangles are relentless in their direction, until they end of course, when they are typically quickly and completely retraced. The thrust started on December 31, and must be a 5-wave impulse. It appears that waves 1,2,3 and 4 blue are complete, and wave 5 blue is underway.
Using the Elliott Wave triangle measuring technique (shown many times on this website and in my weekly “Counts” webinars), the thrust target for the SPX is 1684.10. However, it is possible, depending on where you mark the end of blue wave 1, that blue wave 3 was shorter than blue wave 1. Wave 3 cannot be the shortest of waves 1, 3, and 5 in an impulse, so this would provide a ceiling to how far blue 5 can travel. This “ceiling” is shown on the chart at 1648.42. If wave 5 cannot move beyond 1648.42, the upper targets shown on the chart cannot be reached, leaving us with the low target of 1608.54, where black C will equal black A times .618.
However, this “ceiling” is predicated on the proper placement of the blue 1 label, and it is possible that blue 1 ended in an alternate position (shown by the blue “1?” label on the chart), allowing blue 3 to be slightly longer than blue 1, negating the “ceiling” idea altogether.
So when will the rise end? Thrusts from triangles usually travel within a narrow channel. The top is likely “in” once the channel containing all of the price action since January 4 is broken to he downside by a small-degree 5-wave impulse. The trend change would be additionally confirmed with movement below 1536.03, negating a nested 1-2 count starting December 31.
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