Since the major bottom made in March 2009 the SPX appears to be in either a developing extended five wave pattern or in the later part of a rising Zigzag. Regardless of which pattern is correct based on the recent monthly MACD bullish cross over the bull market could continue for several more months before a major peak is in place.
Fibonacci time cycles point to a possible major top somewhere in either the first or second quarter of 2017. RN Elliott not only discovered the wave principle but also that markets can move in segments related to the Fibonacci sequence.
In his 1946 monograph “Natures Law” he illustrated several monthly and yearly Fibonacci relationships between 1921 and 1942. The problem when using Fibonacci time analysis on a yearly or monthly scale is lack of precision. For example, Elliott illustrates the 1932-1937 bull market as a Fibonacci 5 years, the actual length was 4 years and 9 months. So when using a yearly scale, we just want to get into the ball park.
The current bull market began in March 2009. Adding the Fibonacci sequence number of 8 years’ targets March 2017 as a bulls-eye time target. Plus, or minus 3 months gives a broad range of January to June 2017 for a possible major market peak.
Elliott also discovered that using parallel tend lines could be very effective in discovering five wave patterns. In the illustrated monthly SPX chart, we can see that there is a five wave pattern under development from the 2010 bottom. It is not necessary for the SPX to hit the upper trend line to register a completion of the pattern.
In a future post I will discuss possible price targets for the termination of the bull market.
Fibonacci time cycles point to a possible major top somewhere in either the first or second quarter of 2017. RN Elliott not only discovered the wave principle but also that markets can move in segments related to the Fibonacci sequence.
In his 1946 monograph “Natures Law” he illustrated several monthly and yearly Fibonacci relationships between 1921 and 1942. The problem when using Fibonacci time analysis on a yearly or monthly scale is lack of precision. For example, Elliott illustrates the 1932-1937 bull market as a Fibonacci 5 years, the actual length was 4 years and 9 months. So when using a yearly scale, we just want to get into the ball park.
The current bull market began in March 2009. Adding the Fibonacci sequence number of 8 years’ targets March 2017 as a bulls-eye time target. Plus, or minus 3 months gives a broad range of January to June 2017 for a possible major market peak.
Elliott also discovered that using parallel tend lines could be very effective in discovering five wave patterns. In the illustrated monthly SPX chart, we can see that there is a five wave pattern under development from the 2010 bottom. It is not necessary for the SPX to hit the upper trend line to register a completion of the pattern.
In a future post I will discuss possible price targets for the termination of the bull market.