The current SPX situation has several near term wave counts that could be under construction. This post deals with another possible alternate wave count.
Most of the time after an Elliott wave Horizontal Triangle there's a dynamic thrust in the direction of the primary trend, which in this case is up.
The rally after what I labeled minute wave "e" of minor wave "4" has been feeble. If this was a post triangle trust up, the SPX should already be at a new all-time high.
Something else could be developing. In a minority of the cases the movement after a Horizontal Triangle can be an Ending Diagonal Triangle (EDT).
EDT''s are slow to develop, and each sub waves divide into a three wave pattern. This could be what's happening since the end of the Horizontal Triangle.
I continue to believe that the primary trend for the SPX is up and that it could rally into a major Fibonacci cluster in the 3050 area.
The main reasons for my bullishness are.
1) The SPX all- time high of 2872 was not near any major Fibonacci coordinates. Major in this case would encompass Fibonacci points measured over a period of several years.
2) The monthly, weekly, and daily SPX-RSI all had maximum readings at the 2872 top. Stock indices almost always reach significant tops with bearish RSI divergences.
3) The RUT has continued to make new all-time highs, while the SPX and DJIA are below their respective all-time highs. Stock bull markets end with quality stocks topping last.
Why would the small cap stocks in the RUT be the last to make a top? Big stock market declines are caused by weakness in the economy. It is illogical to expect RUT to be the last
US stock index to peak prior to an economic down turn.
Near term the SPX is in a neutral zone. If the SPX were to move decisively above important resistance at 2800 - 2802 it could open the door to rally into the next resistance at 2872.
Mark
Most of the time after an Elliott wave Horizontal Triangle there's a dynamic thrust in the direction of the primary trend, which in this case is up.
The rally after what I labeled minute wave "e" of minor wave "4" has been feeble. If this was a post triangle trust up, the SPX should already be at a new all-time high.
Something else could be developing. In a minority of the cases the movement after a Horizontal Triangle can be an Ending Diagonal Triangle (EDT).
EDT''s are slow to develop, and each sub waves divide into a three wave pattern. This could be what's happening since the end of the Horizontal Triangle.
I continue to believe that the primary trend for the SPX is up and that it could rally into a major Fibonacci cluster in the 3050 area.
The main reasons for my bullishness are.
1) The SPX all- time high of 2872 was not near any major Fibonacci coordinates. Major in this case would encompass Fibonacci points measured over a period of several years.
2) The monthly, weekly, and daily SPX-RSI all had maximum readings at the 2872 top. Stock indices almost always reach significant tops with bearish RSI divergences.
3) The RUT has continued to make new all-time highs, while the SPX and DJIA are below their respective all-time highs. Stock bull markets end with quality stocks topping last.
Why would the small cap stocks in the RUT be the last to make a top? Big stock market declines are caused by weakness in the economy. It is illogical to expect RUT to be the last
US stock index to peak prior to an economic down turn.
Near term the SPX is in a neutral zone. If the SPX were to move decisively above important resistance at 2800 - 2802 it could open the door to rally into the next resistance at 2872.
Mark