Dr. Arnout ter Schure | Jan 26, 2023 20:55
As the S&P 500 (SPX) continues to move along our primary expectation, we continue to keep an eye on the $4400 target. Namely, last week, see here, as the index had just bottomed, we did not have enough price data available yet to elucidate if:
"[the] low at $3884, which is the 50% retrace of red W-i, [was] technically enough to consider the correction complete."
As such, we concluded last week
"We cannot yet dismiss red W-ii becomes more pronounced and subdivided. It can be in green W-b to around $3950+/-25 before green W-c down to $3820-50 takes hold. But, if the index closes above this week's high, then red W-iii is essentially confirmed, barring an irregular flat W-ii. "
Still, we "prefer[ed] to look higher short- to intermediate-term. Once SPX4300+ is reached, we will become much more cautious in anticipation of the blue C wave."
Less than a week later, the index is trading 100p higher, closing above last week's high. Thus our primary expectation, based on the Elliott Wave Principle (EWP) , for higher prices was correct, and the rally to SPX4300+ should be underway. See the road map in figure 1 below.
The chart above contains a lot of information, so let us focus on the main points:
Combining these three facts, we have a confluence of three different wave degrees: SPX4310-4505, SPX4375-4750, and SPX4395+/-5. Thus SPX4300-4400 should be our primary focus. Currently, the index should be in grey W-ii of green W-3 of red-W-iii of black W-c of blue W-B. Quite the mouthful, but in other words, the index makes higher highs and lower lows. That is a Bullish sequence.
Besides, the index broke out above its 200-day simple moving average (solid red line in Figure 1) and above the trendline that has held all upside in check between the ATH and mid-January. Both are significant developments, Bullish until proven otherwise. What can that 'otherwise' be? A break below yesterday's low for starters, followed by a break below last week's low. Until that happens, we continue to see no reason for this Bull run we have been tracking since mid-October not to unfold.
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