S&P 500 waves - The road to 4000 needs a pit stop first
I still firmly believe that the current wave since March is a corrective wave and I still believe a wave C is coming. However, every day that goes by it becomes more and more clear that this market is going full FOMO rally and the large correction that seemed clear to happen has slowly faded away. Does not matter if the Fed can actually stop a larger correction. They don't need to right now. What matters is that buyers assume that the Fed can. Without fear, it seems like the rally will continue and any and all corrections will be bought up. Who wants to be the guy who missed out on the rally twice!
Anyways, from the wave analysis it has always been clear that the S&P 500 most likely has another wave to go. I just thought it would take a lot longer to get there. You can see from the wave count either from 1994 or 2010, that the 4000 range is where it wants to go. One thing that seems to work well is use the basic Fib levels for wave analysis (1.0, 1.618, 2.0). If a Wave 3 pushes past 1.618, then take the new level and divide that be 1.618. Then multiple that times 2.0 to get the end of wave 5. Example: Wave 3 ends at 1.854 in March --> 1.854/1.618 = 1.146 --> wave 5 ends at 1.146*2.0 = 2.29 -> closest fib level is 2.382. So I am guessing that the top of this rally ends at 4159 range. I did the same thing from the March 1994 low and get a 3.272 and 4140 for wave 5 end. That is a good a guess as anyone could hope for.
As for that correction, well as I stated I still think one is coming, just not as big as some would expect. Looking at support levels and the previous corrections, I am leaning towards the 3100 range. Also not the massive momentum in the MACD. Higher than early 2020. Also, the RSI is reaching overbought, right in line with previous corrections as well as a clear divergence compared to Feb. The timing also lines up well with my Adv-Decl and VIX. analysis.
As usual, just a lot of guessing and as usual the market likes to prove me wrong.
Hope it helps and good luck.
Anyways, from the wave analysis it has always been clear that the S&P 500 most likely has another wave to go. I just thought it would take a lot longer to get there. You can see from the wave count either from 1994 or 2010, that the 4000 range is where it wants to go. One thing that seems to work well is use the basic Fib levels for wave analysis (1.0, 1.618, 2.0). If a Wave 3 pushes past 1.618, then take the new level and divide that be 1.618. Then multiple that times 2.0 to get the end of wave 5. Example: Wave 3 ends at 1.854 in March --> 1.854/1.618 = 1.146 --> wave 5 ends at 1.146*2.0 = 2.29 -> closest fib level is 2.382. So I am guessing that the top of this rally ends at 4159 range. I did the same thing from the March 1994 low and get a 3.272 and 4140 for wave 5 end. That is a good a guess as anyone could hope for.
As for that correction, well as I stated I still think one is coming, just not as big as some would expect. Looking at support levels and the previous corrections, I am leaning towards the 3100 range. Also not the massive momentum in the MACD. Higher than early 2020. Also, the RSI is reaching overbought, right in line with previous corrections as well as a clear divergence compared to Feb. The timing also lines up well with my Adv-Decl and VIX. analysis.
As usual, just a lot of guessing and as usual the market likes to prove me wrong.
Hope it helps and good luck.
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