$SPX Elliott Wave IV (RED)

Indices reflect human growth and hence have a bullish trend with declines being corrective in one degree or another. That’s why at Elliott Wave Forecast, we keep looking for a bullish path as far as that’s supported in our system. If the pivot gives up, then we look for a correction of a higher degree. Wave think red wave IV has completed at 1819.40 low. Structure of wave V could be a regular impulse or an Ending Diagonal which is seen in Elliott Wave C or 5. We need more data to determine the exact short-term structure. Index could be doing a diagonal in wave ((1)) of V or will do a regular impulse up from 1819.40 low to complete wave V. Targets for red wave V are in the range of 2062 – 2100 which would end the cycle from June 2013.  Index has accelerated higher today and didn’t see any selling at 50 back of the decline from 2019 which is a good sign for the bulls. It could even turn into a bullish consolidation triangle but remains bullish as far as pivot at 1819 low keeps on holding. Even if Index fails the highs and breaks the pivot at 1819 low it would still be a buy after double correction lower.


10.9.2014 SPX turns lower after completing FLAT correction

SPX has been star of the day as it retraced yesterday’s entire rally. We never bought into the strength and always knew market was doing a FLAT. Index is now expected to trade lower toward 1873 – 1851 (equal legs – 1.236 ext area) to complete red wave IV where we like to be swing buyers in the Index. Recent up and down swings in 1 hour must have led to frustration in many traders but we have known for a while that Index is in red wave IV and trade is to let the correction play and then buy lower for a swing trade. Ideally we should look for a test of 1912 (0.618 ext) from where we could get a bounce in 6th swing followed by another push lower toward 1873 – 1851 to end a cycle from 2019 high and then Index should resume the trend to the upside. We always recommend keeping an eye on higher time frame charts and trading in direction of higher degree trend.

10.8.2014 FLAT Elliott Wave Structure in SPX

We take a look at short-term price action in SPX500. We saw a perfect bounce from equal legs area in ( W ), rejection at 50% retracements, a marginal new low and then a very sharp rebound. Based on 9 swings down from 2019 and marginal new low before rallying impulsively, we think it’s doing a FLAT in wave ( X ) with equal legs  of A-B coming at 1976.73 and 1.236 ext of A-B at 1989 and should ideally drop to new lows after or at least pull back in 3 waves in the worst case scenario. We know market is in a 4 hour correction and corrections can take many different structures so our strategy is to wait for correction to resolve and then buy the Index for new highs. Ideal area would be equal legs of  (W ) – ( X ) when wave ( X ) has completed.