In my 10/7/18 post I noted that the last SPX rally into the all-time high was not impulsive and it implied the bull market would continue. On a larger scale
the entire SPX rally from the February is not impulsive. Today the SPX broke important support and my prior wave count is now invalid. Does this mean a new bear market has just begun? The answer is no. The SPX pattern from the February bottom has way too much chop to be a standard impulse wave. The rally does not have the form of a completed Elliott wave - Ending Diagonal Triangle. So What could be happening? The best count has a Horizontal Triangle ending in May followed by wave (1) of an Ending Diagonal Triangle that is under construction. The recent sudden sharp decline is a complete or nearly complete Expanding Flat. Wave "twos" in a rising Ending Diagonal Triangle are usually sharp and deep. Most of the time wave "twos" of EDT's retrace more than .618 of wave "one".
The SPX has moved below .618 of the EDT wave (1) that began in early May. If a bottom is not in place the .618 retrace of the Feb to Oct rally is at 2687. Chart support is at 2691.
This is a zone for a bottom that could appear on 10/12/18.
Another reason to be suspicious of the SPX 2940 high as the end point for the bull market comes from Fibonacci analysis.
Major and Intermediate degree stock market turns come at significant Fibonacci resistance/support points. SPX 2940 is no where near any significant Fibonacci resistance. As I have posted for several months the next major SPX Fibonacci resistance point is at 3047.
Another suspicious factor, why wasn't the round SPX number 3000 hit,or at least come very close. All markets are drawn towards round numbers, why would 3000 be missed?
Daily RSI and Stochastic are extremely oversold, implying a powerful rally could be imminent.
The Elliott wave price structure and Fibonacci analysis strongly suggest the bull market is still alive. My price target for a major SPX peak remains 3050. Time target is now Late December to Early January.
Congratulations to the bears you've had a great week. Take profits fast.
Mark
the entire SPX rally from the February is not impulsive. Today the SPX broke important support and my prior wave count is now invalid. Does this mean a new bear market has just begun? The answer is no. The SPX pattern from the February bottom has way too much chop to be a standard impulse wave. The rally does not have the form of a completed Elliott wave - Ending Diagonal Triangle. So What could be happening? The best count has a Horizontal Triangle ending in May followed by wave (1) of an Ending Diagonal Triangle that is under construction. The recent sudden sharp decline is a complete or nearly complete Expanding Flat. Wave "twos" in a rising Ending Diagonal Triangle are usually sharp and deep. Most of the time wave "twos" of EDT's retrace more than .618 of wave "one".
The SPX has moved below .618 of the EDT wave (1) that began in early May. If a bottom is not in place the .618 retrace of the Feb to Oct rally is at 2687. Chart support is at 2691.
This is a zone for a bottom that could appear on 10/12/18.
Another reason to be suspicious of the SPX 2940 high as the end point for the bull market comes from Fibonacci analysis.
Major and Intermediate degree stock market turns come at significant Fibonacci resistance/support points. SPX 2940 is no where near any significant Fibonacci resistance. As I have posted for several months the next major SPX Fibonacci resistance point is at 3047.
Another suspicious factor, why wasn't the round SPX number 3000 hit,or at least come very close. All markets are drawn towards round numbers, why would 3000 be missed?
Daily RSI and Stochastic are extremely oversold, implying a powerful rally could be imminent.
The Elliott wave price structure and Fibonacci analysis strongly suggest the bull market is still alive. My price target for a major SPX peak remains 3050. Time target is now Late December to Early January.
Congratulations to the bears you've had a great week. Take profits fast.
Mark