Waves Show The S&P 500 Should Be Headed For A New High

The next phase, which is currently underway gives us a count to ~4310.  Long-term base counts which are provided by a 3X10 chart can be fine-tuned and re-confirmed by the 1X10 chart pattern which defines the most recent re-accumulation phase – in this case, with a count taken across the 4100 level.  This short-term count calls for a move to ~4350, which in fact pretty well verifies and confirms the base phase count taken in 03/2020.  This price projection would seem to be in tune with the structural pattern which calls for one more short-term move higher (wave 5), to complete the structure from 3723, from which the last phase uptrend got underway.  

As always, there is a caveat that the analysis could go awry, and this would become evident if SPX should fail to make a new high over the next week or so.  

SPX hourly chart 

On the hourly chart we can follow the short-term progress of the index.  After ostensibly making a wave 3 high at 4238 on 5/07, and a wave 4 double-bottom prompted by the bottoming of the short-term cycle last Tuesday, SPX now appears to have started wave 5 which made a high at Friday’s opening (1/5?) and started a near-term correction which does not appear quite complete, and which could retrace .382 of the first wave to 4139 before it is ready to resume its uptrend. Since it would also find support from the 50-hr MA at that level, it would appear the more logical target, but we cannot exclude a full 50% retracement to 4124 since this is more frequent.  

A continuation of the price declining beyond 50% would be suspicious and could lead to a revision of the current analysis.  

UUP (dollar ETF) DLY 

UUP again made a new low last week, but that low was made last Monday, and the index held that low for the rest of the week which gave the oscillators the opportunity to develop positive divergence, which is more apparent in the SRSI.  This could mean that it is ready for at least a short-term reversal.  At the same time, $USD appears to be at or near a (temporary?) downside projection on its P&F chart (UUP).

View single page >> |

The above comments, as well as those made in the daily updates and the Market Summary about the financial markets, are based purely on what I consider to be sound technical analysis principles. ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.