Here's what SPX looks like according to my Elliott Wave Theory analysis.
The end of Wave C of Corrective Wave A-B-C is 100 percent projection level of Wave A. This is also where there is support. Wave C can go up to 123.6 percent projection level.
Details of Waves A and B:
And this is what Wave C may look like (currently, Wave 1 - a leading diagonal - of Wave C in formation):
After Wave 1 is complete, there will be a sudden spike forming Wave 2, which may go up near the high of July this year because of false optimism that bear trend is over. And that's when the sharp move down (Wave 3) will begin.
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4 hour chart of SPX after the downtrend started in July this year.
Wave 3 (red coloured) of the Wave 5 (yellow coloured) leading diagonal is forming. Since it's a sharp move down, I am anticipating that Wave 3 (red coloured) is continuing.
Wave 5's (yellow coloured) projection is based on 100 percent projection of Wave 3 (yellow coloured).
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15 min chart
Today, 5th wave is forming. 4th wave got completed yesterday.
5th wave is 100 (to 161.8) percent projection of 3rd wave which is around 4100.
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Hourly chart
5 waves of last wave complete. Hammer candle at 4100 level. Upward movement should begin now.
This is definitely my view as well. QT is going to keep upward pressure on long-term yields for a few years and stocks will be increasingly less attractive.
dyas7233
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Question for you... I have not learned about Elliot Wave Theory but in your way of viewing this, is there any significant probability that you can see it failing to hold support within a couple hundred points of where it is now (down to the 4000's) and going into a bigger wave down, or do you see it as having to rally higher first? And if there is a wave up as you expect, but not quite as high, in your type of analysis is there a way of anticipating a minimum size of the Wave 2?
RS3175
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@dyas7233, The 5th wave (yellow coloured) should retrace up to 4100. This is 100 percent projection of 3 wave. Since we are in a downtrending market, it can retrace even lower. However, the sharp reversal should follow after this retracement. Wave 2 (red coloured) retraces between 50 to 61.8 percent of Wave 1. However, I expect that there would be a strong belief that the downtrend is over. Hence Wave 2 may go up to 78.6 retracement (around 4500). If SPX keeps going lower after 4100 and not go up to form Wave 2 (red coloured), it would mean my entire calculation of Elliott Waves as mentioned in charts above is wrong.
dyas7233
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@RS3175, Thanks for explaining... the additional chart you posted helps make sense of the smaller moves as well.
dyas7233
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@RS3175, do you have any thoughts about whether it bottomed today for this wave, or if it will push a little further down?