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S&P 200 bigger picture: Up to 6800 before going down to 4500

ASX:XJO   S&P/ASX 200 Index
ASX 200 started a new five Elliott wave structure after the completion of correction in Februrary 2009. It has since completed four waves on a monthly scale and is now running upwards in its fifth wave which is likely to terminate around 6800 and go down to around 4500.

Why do I think so?
If we zoom in in the period from February 2016 when the fifth wave started, you would see that ASX 200 has already completed four waves on this weekly timescale (green waves) and is now completing the fifth wave which started in February 2018. Also see a chart copied below.

If we further zoom in the period since February 2018 by going to the daily scale (see below - pink waves), you would notice that ASX 200 has completed two waves and is now running in the third wave. The five waves on the daily scale are likely to be completed by 6800.

Further, 6800 is the top of the bullish channel started in 2008. Also, it is the value of the previous top before the financial crisis which is expected to offer significant resistance.

What would be the correction target?
If the correction is 61.8% then it could take ASX 200 down to 4500, but of course, it also depends on the level from which ASX 200 starts correction. If the correction is up to 78.6%, then ASX 200 will drop to 4000.

When is the correction likely to start and end?
It is difficult to say but I expect the correction to start in Nov-Dec 2018 and to complete by Jan-Feb 2020.

Is there light at the end of the tunnel?
Yes, this entire wave started in 2009 and completing in Feb 2020 would just be the first cyclic wave. After its completion, ASX 200 is expected to start the third bullish cyclic wave which could run for many years and could take ASX 200 up to around 10,000.

Weekly chart

Daily chart

Note: It is not a financial advice. Please trade at your own risk.

Comment: Looks like wave four of the pink wave shown in the daily chart above is now almost complete. S&P 200 could move up in the fifth and the last leg in the coming weeks which may only reach the 6500 level instead of the 6800 level as initially anticipated because the third wave was shorter and fourth wave was deeper than what I had expected.
Comment: Please see a screenshot copied below:



Of course, it is not a trading advice.
Comment: ASX 200 appears to have completed the pink fourth wave. It could now move up in the last fifth wave next week which could take anywhere from 6-10 weeks to complete suggesting that we could see a major correction in November.
Trade safely!



This analysis is just for educational purposes and is not a recommendation to buy or sell. Please do your own research and trade at your own risk.
Comment: ASX has been moving sideways for sometime and has now broken the upward red channel. It is not a good sign and indicates that ASX could move further down. However, if ASX dropped below the red line in the following chart, then the wave count in this idea would be invalid as the fourth wave cannot overlap the first wave. I will revisit the wave count if this happens.



PS: This analysis is just for educational purposes and is not a recommendation to buy or sell. Please do your own research and trade at your own risk.
Comment: ASX bounced up from the red line so the wave count in the chart is still valid. However, further downside is expected if this support is broken.
PS: This analysis is just for educational purposes and is not a recommendation to buy or sell. Please do your own research and trade at your own risk.

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