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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WaveTrack International and its related publications apply R.N.Elliott's "The Wave Principle" to historical market price activity which categorises and interprets the progress of future price patterns according to this methodology. Whilst it may be reasonable to deduce a course of action regarding investments as a result of such application, at no time or on any occasion will specific securities, futures, options or commodities of any kind be recommended for purchase or sale. Publications containing forecasts are therefore intended for information purposes only. Any opinion contained in these reports is only a statement of our views and are based on information we believe to be reliable but no guarantee is given as to its accuracy or completeness. Markets are volatile and therefore subject to rapid an unexpected price changes. Any person relying on information contained in these reports does so at their own risk entirely and no liability is accepted by WaveTrack in respect thereof. © All rights are copyrights to WaveTrack. Reproduction and / or dissemination without WaveTrack's prior consent is strictly forbidden. We encourage reviews, quotation and reference but request that full credit is given.
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