So as promised, here is my take on the S&P 500 and where I see things moving in the next two months.
I feel very confident that we have just completed the 4th corrective wave of this 5 wave impulse. As you can see, this 4th wave is shallow and complicated. And the 2nd wave (Brexit) is deep and cleaner. So all that is left is the 5th wave. I placed OI options price targets in the chart. I also measured what 50% and 75% gain of the 3rd wave would take us as far as the 5th wave is concerned. For the 50% growth price target, we would reach 2215-2216. For the 75% growth price target, we would reach 2240. However, price action will dictate the final outcome. I also measured the amount of time in days and bars for wave 3.
So what my analysis is pointing to, and what I am leaning towards, is a micro 5 wave growth, topping around the 2215 range (red line). I just don’t think we go much higher because it seems too steep for those OI price targets. Either way, it appears that we will make all time highs. (blue line signifies the last high) ATH’s will help solidify the Feds decision to raise rates as they would not raise rates if the market showed weakness like it has this last couple weeks. It appears we top around the end of November and start a steep ABC correction, with C being the big one that would coincide with the Interest Rate hike.
Unless we get a black swan event that triggers this fall (doubtful) I am pretty sure they raise rates in December. So I will be playing the VIX at the end of November. If anything changes then I will update this post.
And just to touch on Yellens latest comments. Of course she and others are going to start to be Dovish. They want the market to go up so they can raise rates. Talking like she is uncertain is BS and helps kick start this 5th wave.
So there it is, short and sweet. Hope you like it and hope it is helpful.
The Fib retracement for the whole entire move from back last August to my 2215 price level brings the 61% retracement down to that very long term trend line. Its actually a double line. The bottom of the two lines is the measurement of the bottom of the wicks. So if we hit 2215, then that is coincidently a perfect fit. When I saw that I was surprised but felt confident of my analysis.
Lastly, cyclically speaking, we would be due for a ICL (intermediate cycle low) for the stock market. I knew I forgot more stuff, but It was late and I was tired. hope this is even more helpful.
Hope that helps