SP500 and Nasdaq 100 holding above Oct./Nov. lows – Bullish!
|SP500 - Keep Cool!
- The SP500 has been marked lower overnight but current selling is expected to dissipate with levels holding above the late-October lows, then pushing higher over next few weeks into year-end
The SP500 has traded initially lower from Friday’s closing session but is now responding to support at 2610.25+/-, a fraction below the late-November low of 2626.00 but above the all-important late-October low of 2603.00.
In fact, the recent decline from 2814.00 is consistent with completing a horizontal flat pattern which was the original concept featured in the November 28th report – see fig #1. The idea behind this scenario when, at the time, the S&P was just turning higher from 2626.00 was that it would re-test towards the previous high at 2818.00 (2815.50 cash index), then decline in a five-wave pattern back towards 2626.00+/- to complete wave (b) – see red-boxed rectangle, left.
Those price movements have now been accomplished basis today’s decline to 2610.25+/-.
In the November 28th report, we commented that a horizontal flat pattern was possible for wave (b) because it would CONSUME MORE TIME, allowing the next upswing as wave (c) to test the upper/declining boundary line of the developing triangle pattern. That seems to be confirmed from this latest price action. Upside targets as before, towards 2855.00-82.00+/-.
Conclusion
The markets are portraying all the characteristics of nervousness, anxiety and distress which commonly occurs at ‘price-extremes’, in this case, at an important low. The dollar interest rate yield-curve inversion at the US02-05yr term and trade tariff concerns are playing their part – but if Elliott Wave analysis has anything to say, then markets are still building an important platform of support which leads to higher-highs over the coming weeks and months ahead.
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