Called the top, now the next 2 bottoms

SP:SPX   S&P 500 Index
It appears Minor wave 3 (yellow number 3) may have concluded. I called the top around 4112 and it hit 4110.75 near the close on Friday. We shall see how Monday opens but a new low should be in the making over the next two days. Next up is Minor wave 4. The historical data has been very consistent with a 47-49% reversals for wave 4s in wave 1s in wave Cs. I initially thought that is too much in a 1-2 day span (drop of nearly 100 points), it is certainly not impossible with the market’s volatility during this overall bearish market.

The gains should continue for a final hurrah to end the week after Minor wave 4 is completed (most likely) on Tuesday. Minor wave 5 is also the end of Intermediate wave 1 (purple number 1). Historically these waves extend around 117% of their respective wave 3s. The top should not really be higher than 4150, but the current placement on the chart is temporary and will get updated once Minor wave 4 is complete and the data is applied to the program.

Minor wave 1 was 7 days long while Minor wave 3 was only 5 days long. Elliott wave rules state wave 3 cannot be the shortest wave therefore Minor wave 5 mush be 5 days or less. If wave 5 begins on Tuesday, day 1 would not start until Wednesday. This means Minor wave 5 and Intermediate wave 1 must end by Wednesday April 12 (April 7 is a market holiday). Intermediate wave 2 will likely require a later event to setup at least a week of declines. With the CPI report coming out before the open on April 12th, this is the likely catalyst for Intermediate wave 2. It most likely means Intermediate wave 1 would end on or before April 11th around 4145.

The placement of Intermediate wave 2 is even more of an estimate with an initial forecasted length around 6-7 days. This would coincide with the beginning of earnings season. The banks kick it off next week, but reports start coming in around April 20th. Complete WAG is a low below 3990 by April 19.

We will continue to watch how this all unfolds as we climb to the next major peak around 4400 early this summer.

All forecasts are based on analysis of past behavior. Prior movements are not always indicative of future movement. Develop the theory, test the theory. Do your own research. Nothing in this analysis constitutes advice. YouTube For More. Good luck!!

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