SPX & Elliott Wave
Updated
Developed in the 1930s by Ralph Nelson Elliott, Elliott Wave Theory proposes that markets unfold in a series of five-wave impulses followed by three-wave corrections. These "waves" represent the collective emotions of investors, shifting from optimism and bullishness (impulsive waves) to fear and bearishness (corrective waves).
The Anatomy of a Wave:
Impulse Waves (1, 3, 5): These are the driving force of the market, pushing prices higher or lower in a sustained trend. They are characterized by strong momentum, increasing volume, and clear directional movement.
Wave 1: The timid start, characterized by low volume and often met with skepticism.
Wave 3: The powerhouse, boasting the highest volume and strongest price surge, often exceeding the gains of the previous two waves combined.
Wave 5: The final push, often fueled by euphoria but experiencing declining volume as the trend nears exhaustion.
Corrective Waves (2, 4): These counter-trend movements retrace a portion of the previous impulse wave's gains. They are characterized by lower volume, consolidation, and indecision.
Wave 2: A pullback following Wave 1, often testing support levels but not exceeding the Wave 1 high.
Wave 4: Another correction, often deeper and more complex than Wave 2, but not violating the low of Wave 2.
Fractal Magic: The beauty of Elliott Wave Theory lies in its fractal nature. Each wave, whether impulsive or corrective, can be further subdivided into smaller waves that follow the same five-wave or three-wave pattern. This allows traders to apply the theory to different timeframes, from short-term day trading to long-term investment strategies.
Volume as a Guide: While identifying wave patterns is key, volume confirmation adds another layer of insight. Remember that Wave 3, the engine of the trend, should experience the highest volume as bullish sentiment peaks. Conversely, Wave 5, the final leg, should see declining volume as the trend loses steam and investors become cautious. This volume divergence can serve as an early warning sign of a potential trend revers
The Anatomy of a Wave:
Impulse Waves (1, 3, 5): These are the driving force of the market, pushing prices higher or lower in a sustained trend. They are characterized by strong momentum, increasing volume, and clear directional movement.
Wave 1: The timid start, characterized by low volume and often met with skepticism.
Wave 3: The powerhouse, boasting the highest volume and strongest price surge, often exceeding the gains of the previous two waves combined.
Wave 5: The final push, often fueled by euphoria but experiencing declining volume as the trend nears exhaustion.
Corrective Waves (2, 4): These counter-trend movements retrace a portion of the previous impulse wave's gains. They are characterized by lower volume, consolidation, and indecision.
Wave 2: A pullback following Wave 1, often testing support levels but not exceeding the Wave 1 high.
Wave 4: Another correction, often deeper and more complex than Wave 2, but not violating the low of Wave 2.
Fractal Magic: The beauty of Elliott Wave Theory lies in its fractal nature. Each wave, whether impulsive or corrective, can be further subdivided into smaller waves that follow the same five-wave or three-wave pattern. This allows traders to apply the theory to different timeframes, from short-term day trading to long-term investment strategies.
Volume as a Guide: While identifying wave patterns is key, volume confirmation adds another layer of insight. Remember that Wave 3, the engine of the trend, should experience the highest volume as bullish sentiment peaks. Conversely, Wave 5, the final leg, should see declining volume as the trend loses steam and investors become cautious. This volume divergence can serve as an early warning sign of a potential trend revers
Note
Looking for an extremely imminent pullback in the S&PIdeally 1st support will hold and then we head higher to new ATHs
Ultimately the 2nd support needs to hold if we want to see those new ATHs
Any sustained break of the 2nd support opens the door to much larger sustained downside risk
BUT REMEMBER: Even if we get new ATHs the destination over the next 5-8 years is SUB 2000 with expected levels reaching as low as 666-1500 spx
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If Support holds then we should head toward ATHsIf Support breaks we will head towards 4600
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Highly suggest you take note of the Targeted Topping ZoneMarket structure is suggesting that we may not get too far above that zone on this move.
In fact we may not break that zone at all
Essentially we are saying if you look at what we have been predicting with the broad markets price may not touch this zone again for a decade
Trying to sound the alarm here
We sincerely hope this analysis is wrong because we are not sure the vast majority of people understand the true nature of what we are facing in this country and throughout the world
Please Please Please get prepared
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Get Ready!Note
Tweaked the targets a bitNote
ALERT!!!The break of the 5100 level today and the move lower is the huge sign that a major top has been established in the market
BUT even if new All time highs are made we still think the market will find a major ceiling between 5300 and 5400
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Near term expectationsNote
Lets see how this plays outNote
Market generally progressing as expected.Its possible all of Wave (C) is complete but the market appears to still want to rally a bit
Lets see
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Zooming out a bit to better see the move we are trackingNote
Ok its pretty clear to us where price is most likely headedSlightly tweaked the count.
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CRITICAL MARKET SUPPORT AREASThe market appears to be setting up for a significant downturn
We are expecting that downturn to begin by the end of this week/ early next week
This could be really ugly
PLEASE TAKE CAUTION
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CRASH ALERT!!!BE CAREFUL!!!
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One last push higher and we should see price fall off a cliffNote
IWM about to go down in flames!!!Note
Ok we are in the target crash zone.We are on high alert for a significant downturn...i certainly hope we are wrong because this going to be UGLY
Expect one more smaller push higher and then watch out below
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Price pushed higher as expected. BE CAREFUL!
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Get Ready
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