Commentary on the SPX
The question remains as to whether the SPX is currently experiencing a correction in the up trend from the February 2016 low, or whether the up trend is complete and the SPX is about to commence a much more significant move lower.
If you compare the current wave pattern to that at the beginning of 2016, it can be seen that at this point in time there are similarities. Furthermore, there is no apparent divergence between the MACD and Price, or a clear series of lower highs and lower lows, which would indicate a change in trend. Consequently, a strong move higher over the next week or so could still occur, suggesting that there is one further significant move higher still to go.
There are, however, a lot of negative considerations in play. An overthrow of the upper blue trend channel would suggest buying exuberance, often associated with the formation of an EW 5th Wave. The lower blue channel trend line on the Price chart has now been pierced and the MACD has clearly broken through green trend line support, with momentum firmly to the downside. It would seem to me that the 2500 level is a key number to focus upon, as if the SPX finishes below that number by the end of the coming week, then the odds of a third wave lower being in play will have substantially increased.
Disclaimer
Please note that any Elliott Wave count shown is a ‘work in progress’ used as a tentative guide only, is likely to be revised as price movement continues, and should not be relied upon as being accurate.
This blog is for entertainment purposes only and any information shown should not be taken as a recommendation or otherwise for trading, investing or similar purposes. Furthermore, the accuracy, interpretation and use of any of the information shown should not be relied upon or taken as being correct. Always take the appropriate care and caution before risking your capital in an investment and seek suitable advice from a qualified source as appropriate.
