S&P 500 Waves since 1995 - End of supercycle wave 3??
Don't take this idea too seriously. It is very possible that we just experienced the end of supercycle wave 3 and we are headed to another larger correction for supercycle wave 4.
One sign that stands out is the correction in March could have easily gone lower. The lows in 2017 and 2018 create a trendline that is lower than what we actually saw in March. However, there is an important rule for Elliott waves that wave 4 cannot enter the territory of wave 1. Note that in the chart the March correction stopped just shy of this level. I don't think that is a coincidence.
Another thing, the recent ATH stops perfectly at the 2.786 fib level, which required it to break the black 2009 trendline by one day. Again, I doubt it was a coincidence. I am a little puzzled by that fact that it stopped just a few points short of the 2.0 fib level from the 2009 bottom. That could be a measurement/fib tool error or maybe it does not really need to hit 2.0 to make the everything happy. Maybe it will hit that level via a double top test in the next few days. Maybe it means nothing.
If this is true and we are headed to a corrective wave 4, then it makes sense that the S&P follows the megaphone pattern and touches or breaks the support line. That would be around the 2010 level. Crazy, right? Note that another rule is that wave 4 cannot retrace more than 50% of wave 3. However, that still would allow the S&P to return to the mean, which is what the market likes to do during major corrections. Obviously, I don't know when it will bottom out. I just guessed base on the extreme volatility of the market lately. In my chart it takes 2 months starting in Sept. FYI, March crash was less than a month.
Seems a bit out there to assume we are head for such a major correction, but if we can go down in 3 weeks back up in 5 months then anything seems possible now a days.
Now even more out there is what comes next. After all of this we still have a wave 5 to complete. By my calculations that would take us up to 4270. Assuming it stays inside the megaphone, then we could see that high in the 2023 timeframe.
One sign that stands out is the correction in March could have easily gone lower. The lows in 2017 and 2018 create a trendline that is lower than what we actually saw in March. However, there is an important rule for Elliott waves that wave 4 cannot enter the territory of wave 1. Note that in the chart the March correction stopped just shy of this level. I don't think that is a coincidence.
Another thing, the recent ATH stops perfectly at the 2.786 fib level, which required it to break the black 2009 trendline by one day. Again, I doubt it was a coincidence. I am a little puzzled by that fact that it stopped just a few points short of the 2.0 fib level from the 2009 bottom. That could be a measurement/fib tool error or maybe it does not really need to hit 2.0 to make the everything happy. Maybe it will hit that level via a double top test in the next few days. Maybe it means nothing.
If this is true and we are headed to a corrective wave 4, then it makes sense that the S&P follows the megaphone pattern and touches or breaks the support line. That would be around the 2010 level. Crazy, right? Note that another rule is that wave 4 cannot retrace more than 50% of wave 3. However, that still would allow the S&P to return to the mean, which is what the market likes to do during major corrections. Obviously, I don't know when it will bottom out. I just guessed base on the extreme volatility of the market lately. In my chart it takes 2 months starting in Sept. FYI, March crash was less than a month.
Seems a bit out there to assume we are head for such a major correction, but if we can go down in 3 weeks back up in 5 months then anything seems possible now a days.
Now even more out there is what comes next. After all of this we still have a wave 5 to complete. By my calculations that would take us up to 4270. Assuming it stays inside the megaphone, then we could see that high in the 2023 timeframe.
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