Since our last update on SPX500, Index pulled back to 2091 (50 fib) and has rallied to new highs as expected. Focus remain on 2122 – 2139 area to complete red wave “W” which we think would complete a double three i.e. ((w))-((x))-((y)) Elliott wave structure up from 3/11 (2039) low. This is where buyers would be looking to book profits and this profit taking is expected to result in a larger 3 wave pull back to correct the cycle from 3/11 low. We don’t like selling the Index and view wave “X” pull back as the next buying opportunity and it could take us back toward 50 – 61.8 fib zone of the rally from 3/11 (2039) low. Pivot at 3/11 (2039) low should stay intact for this bullish view to remain valid.
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