SPX Nearing or at End of Horizontal Triangle

SP:SPX   S&P 500 Index
Over the last several weeks it has appeared laughable to even suggest going long US stocks.
As recently as 4/2/18 it looked like we were at the doorstep of financial crisis.
On 4/13/18 the US launched an attack on Syria. There's a possibility the Russians could get involved.
Some in the US news media are saying the US president is mentally unstable.
Scary times indeed.

We as traders need to focus on what the market is telling us.
Messages from the market come from momentum and sentiment indicators.

Momentum: On 3/23/18 the SPX closed at 2588 with 215 new NYSE 52 - week lows.
On 4/2/18 the SPX closed at 2581 with 133 new NYSE 52 - week lows.
A significant bullish divergence .

Sentiment: On 3/23/18 the daily CBOE put/call ratio reached its highest level since 2015. Please see my prior post on this subject.
The CBOE put/call ratio is posted every 30 minutes through out the trading day for US stocks.
On the open of 4/4//18 the put/call ratio spiked up to an incredible 2.10 which indicates extreme bearishness.
This very high put/call ratio came right after news about a possible trade war between the US and China.
Put/call ratios are a contrary indicator, meaning extreme bearish readings indicate a bottom could be in place.

On 2/24/18 I speculated the SPX could be forming an Elliott wave Horizontal Triangle.
Since then both rallies and declines have been very choppy - a signature of Horizontal Triangles.
I believe wave "d" - boxed of the Triangle is complete. The last part of wave "d" appeared to have formed an Ending Diagonal Triangle ( EDT ).
If so, the subsequent move after an EDT is a rapid move back to its point of origin. Which in this case is SPX 2610.

There could be a Fibonacci time cycle in effect. 55 trading days from and including the triangle top on 1/26/18 targets 4/17/18
55 trading days after and not including 1/26/18 targets 4/18/18. I think the SPX could complete the Horizontal Triangle in the SPX 2610 area on either 4/17 or 4/18.
A move below the SPX bottom at 2532 made on 2/9/18 will invalidate this count.

As traders with must turn off the noise - I mean news and focus on what the market is telling us.
The SPX momentum and sentiment indicators are telling us go long US stocks.

Thanks for the detailed analysis, Mark! So, you believe that we still can long SPX/SPY?
Hi @zhilin,

Yes, unless the SPX breaks below the 2/9/18 low at 2532, sentiment, momentum and wave structure indicate a rally to new highs.

zhilin markrivest
@markrivest, Great! Thanks!
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