E S&P500 Looking Bullish Mid-Term

S&P500 made a five-wave rise from the 2185 level, where a higher degree wave (IV) correction found support. That said, the mentioned five-wave rally can be an indication of where the trend can be going; to the upside. If that is the case, then we should be aware of further upside on the stock market, however, we should also be aware of pullbacks.

After a five-wave recovery develops, price starts to form a temporary pullback, a pause within a trend. In our case, this can already be happening, as higher degree wave A/1 with a five-wave move looks to have found a top at the 3234 level. Now, we are observing a three-wave set-back to occur in a wave II/B, with possible support/bullish reversal zone at the 2870/2600 region, where former swing low of a wave 4, and Fib. ratios of 38.2/61.8 can react as support.

All being said, after wave II/B fully develops, and we see a rise in five waves of a lesser degree, that is when bulls can regain control.

S&P500, daily

(Click on image to enlarge)

 

Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.

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William K. 1 month ago Member's comment

Predicting the future based on the past when conditions really HAVE changed is a bit of a risk. This is especially true with the market controlled by emotions and fears. So it will be interesting to see what actually happens.

With the Fed pumping in so much cash, the one reasonable assumption is that inflation will run wild. And that is what I really do not want.