SPX Wave 4 - Black Count

SPCFD:SPX   S&P 500 Index
428 1
Another possible SPX count I'm considering. This one is a little different from the previous Red Count and Blue Count, and potentially more bearish in the long-term.

It's similar to the Blue Count in that it has the impulse topping in September and we're now in Wave A of a correction, but the key difference is that the Blue Count is looking for 3-wave A to start a regular flat, while this Black Count is looking for 5-wave A to start a zig-zag . Which would mean less rally in the upcoming B, and the C-wave going deeper... maybe a lot deeper.

If this scenario plays out, the (B) wave would retrace 38.2%-61.8% to the upside (blue box), and we can then expect the (C) wave to reach at least 1600-1800 region and possibly 1000-1200 if it extends. The deeper target would line up well with the "Similarity to 2007-2008" chart I posted recently.

Another key difference is that the Blue Count assumes this is Primary 4 and we can still look forward to P.5 rally after it's done. This Black Count might do the same -- but also has the potential to extend deep enough to signal that we've already topped in P.5 ending the Bullish Cycle, and we are now starting a new Bearish Cycle which could take several years to play out.

Shout-out to WhiteKnightMoving, whose chart led me to consider this possibility. While our targets are slightly different, the overall prognostication is the same.
Dec 26
Comment: 12/26 Update - similar to the Red Count, this one is playing out nicely. Moved the 'iii' down to the 1.382 extension, and leaving other targets alone for now. We might already be topping in 'iv', or possibly just A of iv in which case the rest of iv should target a bit higher. See 1-minute chart -- it went parabolic, we're very overbought and have divergence, so we're topping in something.

Dec 28
Comment: 12/28 update - similar to the Red Count, this count is still playing out as shown. We seem to have topped in 'iv' today, so I moved the marker in. Other targets remain unchanged.

Jan 04
Comment: 1/4 Update - similar to the Red Count, this is not invalidated, but (iv) is starting to get too big for wave 4 of that degree. Added purple "alt" labels and channel for another possibility, which could be taking shape as a diagonal. Next targets would likely be the 0.618 and 1.618 blue fibs, but first we need to see where Alt-4 (or iv) tops before estimating the target for Alt-5 (or v).

Jan 12
Comment: 1/12 Update - similar to the Red Count, removed (i)-(ii) subcount as wave (iv) invalidated the structure by overlapping wave (i), so the former purple "alt" count is now primary. Price this week came right up to the purple channel and encountered resistance at the 0.618 fib. Expecting a drop to begin soon targeting the 1.618 extension. I would prefer if it extended to the 2180-2200 region to retest the Aug. 2016 highs, but after such a deep retrace in wave 4 that is looking unlikely.

Jan 19
Comment: 1/19 Update - Like the Red Count, this structure is still viable, though losing favor as the market blasted through resistance this week. To continue as a diagonal it needs to turn down VERY soon -- like Tuesday -- though at this point the expected drop would only retest the December low, possibly making a nominally lower low.

Jan 29
Comment: 1/29 Update - Not much to add... It's holding inside the purple channel since the last post, so this count is still on the table. Daily RSI is weakening, so a near-term drop is expected. Will it continue to follow this count all the way down to the target? Time will tell...

Awesome chart!
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