Well, last week was a little sloppy. Let's try again!
Last week I suggested we could use a pullback, but called an audible/abort on Monday once SPX exceeded 2848. I was not comfortable positioned for a pullback since it is against uptrend to expected all time highs. Net result: I'm still not comfortable positioning for a pullback since I only expect about 2% overall decline before resuming a path to new highs. I'd much rather wait it out and then stay with the trend.
While waiting you measure, and Fibonacci retracement metrics are good tools. If you look very closely at the graph you'll note a few things:
Pullback, or trap door? Using Elliott Wave estimates my assessment is we're in wave 3 of that higher degree wave 5. I don't expect lower SPX levels, but suggest keeping track of moving averages (the usual) and the next degree Fibonacci metric (2755). Any breaks below those levels and then the trend lines (yellow, followed by red) would collectively lead to major caution and reassessment.
Last week I suggested we could use a pullback, but called an audible/abort on Monday once SPX exceeded 2848. I was not comfortable positioned for a pullback since it is against uptrend to expected all time highs. Net result: I'm still not comfortable positioning for a pullback since I only expect about 2% overall decline before resuming a path to new highs. I'd much rather wait it out and then stay with the trend.
While waiting you measure, and Fibonacci retracement metrics are good tools. If you look very closely at the graph you'll note a few things:
- 1. Going back to March 2017 low (set to 0) and then up to January 2018 high (set to 1.00) the retracement in February 2018 at .382 was within ONE TENTH OF A POINT (2532.59 vs .69).
2. Using 5/3/18 as 0 (2594.62) and 4/18/18 as 1.00 (2717.49) you get 2793.42 as the 1.618 metric. That was within 2 points of the 6/13/18 high.
3. After pulling back within trend (yellow lines) we bottom on 6/28/18 at 2691.99 within 1 point of the .786 metric.
4. We're now above 1.618 metric and within channel, but looking a bit extended. I'm looking for support at that 1.618 metric (or even slightly higher) before we resume trend.
Pullback, or trap door? Using Elliott Wave estimates my assessment is we're in wave 3 of that higher degree wave 5. I don't expect lower SPX levels, but suggest keeping track of moving averages (the usual) and the next degree Fibonacci metric (2755). Any breaks below those levels and then the trend lines (yellow, followed by red) would collectively lead to major caution and reassessment.