Κυριακή, 17 Ιουλίου 2016

S&P500: Weekend Analysis from ElliottWaveTrader

Author: Avi Gilburt
What Kind of Pullback Will Be Seen Before The Melt-Up?
S&P500, 60MinChart
My theme for 2016 has been that we will likely see the start of a global melt-up in all different asset classes and markets worldwide.  And, when the US equity market broke support in early January, I tried to remain focused on the bigger picture, even though many were moving into the “financial Armageddon” camp yet again:
1turnchart
“As I have said before, I still do not think it is likely that the bull market which began in 2009 has concluded. The larger-degree pattern on the attached monthly chart simply does not present as a standard completed Elliott Wave impulsive structure (especially when considering the internal Fibonacci Pinball calculations) . . .  So, much of what I am seeing aligns with this being a 4th wave correction, rather than something more sinister. Therefore, once this correction has run its course over the next month or, two I am still looking for the market to exceed the 2300 region on the next rally phase, which should still take hold in 2016.

As an aside, I have to say that there are many indications that the next few months can not only see a major bottoming to the U.S. equity markets, but there are many emerging markets which are tracing out long-term bottoms within that expected time frame, along with a potential long-term bottoming in oil and metals.”

And, again, thus far, all the markets we have been tracking have followed through quite nicely in our expectations for 2016.  While some of the smaller degree moves have not always been perfectly aligned, we have been able to maintain an appropriate perspective on world markets and commodities, and have garnered substantial profits with our appropriately bullish world perspective since January, despite all the common fears and expectations to the contrary.  So, while many have been viewing the “realities” as not supportive of further highs in the market, I don’t think anyone informed the market that these really matter.

While I am uncertain yet as to whether the current rally will be taking us immediately through 2185 on our way directly to 2300SPX, I would much rather see a standard pullback before that materializes.  And, amazingly, despite the higher highs, due to the structure of the current rally looking like 3 waves, it has not invalidated the potential for the market to still drop down as low as the 1928-1965SPX region before the bigger melt-up begins, as represented by the yellow count.

As I noted for the last few weeks, July will be a very important month in telling us if we are heading to the 2500SPX region sooner than I expected, or if the market is still going to attempt to pull back to the 1928-1965SPX region first, or even a potential “goldilocks” wave ii in between.

Where that leaves me right now is very cautious as long as we remain below 2185SPX.  I will not know which decline will be taking shape until we see the initial phase of the decline.  But, as I noted, a strong move through 2185SPX (which takes out 2192SPX) tells me that pullbacks will not likely be large, and we may not be revisiting the 1900’s for several years.

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