Is the S&P 500 Still on Track for the 4270s?

Two weeks in the past, see , we discovered for the , utilizing the Elliott Wave Precept (EWP),

“Our most popular state of affairs is for [a] rally to round $4490+/-10, which it achieved right now, after which drop to in the end and ideally ~$4270+/-10 in 5 (gray) waves. … A drop beneath the gray W-i low ($4430 on September 7), will then set off the gray W-iii, iv, and v sequence to ideally $4330+/-15, $4400+/-10, and $4270+/-10, respectively. The latter goal zone can also be the place inexperienced W-c equals the size of inexperienced W-a, measured from the inexperienced W-b (September 1) excessive. A typical c=a relationship. Furthermore, it is usually the place the (crimson) 76.40% extension of crimson W-i resides (see Determine 1 beneath).”

Determine 1. Each day SPX chart with detailed EWP rely and technical indicators.

Quick ahead, and the index’s countertrend (gray W-ii) rally determined to subdivide and lasted by September 14 to $4505, however nonetheless solely 5p above our very best goal zone. On September 16, the index broke beneath $4430 by buying and selling to as little as $4416, signaling the gray W-iii to ideally $4330 was more than likely underway. Though the decline was a bit lower than very best, and a Triangular corrective sample to round $4370+/-10 was potential, our primary-preferred path remained the Flat correction to ideally the $4270s.

Immediately, the index bottomed, to date, at $4302, which is barely 13p beneath the perfect gray W-iii goal zone set forth two weeks in the past based mostly on normal Fibonacci-based extension patterns. Thus, the market’s waves determined to increase. That may all the time occur however can’t be foreseen.

Resulting from this extension, the index ought to now be in orange W-4 to round $4370+/10, adopted by an orange W-5 all the way down to ideally $4280+/-10, and so forth. See Determine 1 above. Alternatively, the index already accomplished the gray W-iii at right now’s low and is now in gray W-iv, adopted by just one final fifth wave decrease to $4270-4230. See Determine 2 beneath.

Determine 2. Hourly SPX chart with detailed EWP rely and technical indicators.

Please be aware the constructive divergence on the hourly RSI5 and MACD (dotted inexperienced arrows). Though solely a situation and never a set off as a result of divergence is barely divergence till it isn’t, that is the primary purchase cross on the MACD since final week to counsel a extra vital bounce is underway.

Thus, based mostly on the EWP, our main expectations for decrease costs got here to fruition, and we are actually monitoring the completion of this impulse decrease that began on September 4. The index should transfer above no less than $4401 to counsel the low is already in place. That will be unorthodox however not inconceivable. For now, we desire to search for a neighborhood excessive at round $4370+/-10 adopted by no less than one decrease low at about $4270-4230 earlier than the decline from the September 4 excessive could be thought-about full.