For only the second time in 2019 I'm issuing a Yellow Alert for US stocks. The last Yellow alert was in early May near the start of the May to June decline. Yellow alert means caution. Hold off on new long positions. This is not a recommendation to sell or short. The long term Elliott wave count for the SPX bull market since 2009 does not appear complete - meaning the action since the all -time high on 7/26/19 is most likely just a correction.
As noted in my 9/8/19 post the decline from 7/26/19 to 8/5/19 appeared to be an Elliott wave impulse which implies it could be just the first wave down of a larger developing decline. The decline from the high made on 9/9/19 has been a very clear five waves followed by a very clear three waves up. Today the SPX closed at the high of the day, usually when this happens there's more upside on the next trading day. Caution, any upside could be very limited as there's chart and Fib resistance just above today's high.
Minimum downside target remains SPX 2800. Next FOMC announcement is 9/18/19 - please see The Swingers comments about FOMC days in my 9/8/19 post.
Hi Mark, Using the S&P futures the 0.88 fib retracement level seems to be coming in at approximately 2999.
If this level fails to stop the rise I would expect price to retest the high @ 3029 on futures so this week is very important.
Your Yellow alert is very timely in my opinion so thank you for posting it.
Paul
A potential move down to 2800, from 2980 currently,as shown on your chart.
If that were come to pass, then why not put out a short recommendation here ?
Looking at the potential 180 handles of bear profit potential there.
move down suggest those points may come quickly to the bears
I would certainly prefer to short a break of 2957, and ride it down the hundred points or so.
No ?
The pattern argues for a short.
Why leave all that frosting off the cake, if you're going to put it into the over, and bake it ?
Hi
Over trading is a main cause of excessive losses. My goal when issuing an alert is to make a call for several weeks - it could be shorter depending on market conditions, if factors warrent - I will will quickly change to Green Alert - go long or Red Alert - sell/short. Currently evidence from the four market dimensions is mixed. As I noted in this post the wave structure from the major 2009 SPX bottom is still bullish, if there's more decline it could be less than I originally thought.
Short term day traders or traders with only a few a days time horizon can of course sell/short but they need to understand - I do not consider this to be an ideal time to short, this is a time to be cautious.
My goal is to issue as few alerts as possible. Please note that almost all of my stock market posts from December 2018 to May 2019 were long recommendations. Traders make the most profit by staying with a trend as long as possible.
If this level fails to stop the rise I would expect price to retest the high @ 3029 on futures so this week is very important.
Your Yellow alert is very timely in my opinion so thank you for posting it.
Paul