In this technical blog, we are going to take a look at the past performance of Elliott Wave Charts SPY, which we presented to members at elliottwave-forecast. In which, the rally from 23 March 2020 low unfolded as a 5 wave impulse structure. Thus suggested that it’s a continuation pattern. And as per Elliott wave theory after a 3 waves pullback, it should do another extension higher in 5 waves impulse structure at least. Therefore, we advised members not to sell the instrument & trade the no enemy areas ( blue boxes) as per Elliott wave hedging remained the preferred path looking for 3 wave reaction higher at least. We will explain the structure & forecast below:
SPY 4 Hour Elliott Wave Chart
Above is the SPY 4 Hour Elliott Wave Chart from the 6/14/2020 Weekend update. In which, the rally from 23 March 2020 low unfolded as 5 waves impulse sequence where wave (1) ended at $263.70 high. Wave (2) pullback ended at $242.94 low, wave (3) ended at $296.77 high, wave (4) pullback ended at $276.37 low. While wave (5) ended at $323.41 high & down from there SPY made a pullback. The internals of that pullback unfolded as Elliott wave double three structure where wave (W) ended at $300.01 low. Wave (X) bounce ended at $319.12 high and wave (Y) was expected to reach $295.77- $281.24 blue box area. From there, buyers were expected to appear in the ETF looking for another 5 waves rally. Or to do a 3 wave reaction higher at least.
SPY 4 Hour Elliott Wave Chart
Here’s 4 hour Elliott Wave Chart of SPY from 6/23/2020 Pre-Market update. In which the ETF is showing reaction higher taking place from the blue box area. Allowed members to create a risk-free position shortly after taking the longs. However, a clear break above 6/08/2020 prior wave (5) peak ($323.41) still needed to confirm the next extension higher & avoid double correction lower.
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