Κυριακή, 14 Αυγούστου 2016

Spx: Weekend Analysis from ElliottWaveTrader

Author: Avi
Will the Market Crash and Burn, or Turn and Burn?
S&P500, 60MinChart

1turnchart
We have two camps of thought in our equity markets.  While we often say that both camps cannot be right, maybe there is some “goldilocks” scenario in between the two camps.
We have one group strongly believing we are about to see an epic market crash. In fact, this camp has been looking for this crash throughout all of 2016 (and many even longer), despite the fact that we have rallied to new all-time highs, which they were convinced would never be seen. But, amazingly, this has not deterred them one bit because they are sticking to their fundamental thesis that the economy is terrible and the market must reflect that at some point in time.
On the other side of the tape, we have the camp that believes we are going to continue to grind higher on our way to the moon.  And, they have a myriad of reasons as to why they are looking for the market to march on towards much higher levels from right here.
While I may be convinced by the latter group (but only under the specific circumstance noted below), my preference remains for a “goldilocks” scenario in between the two perspectives.  But, I do want to state that the former perspective has the least likelihood right now, at least in my humble opinion.
While I was warning investors back in January and February that we are setting up for a global melt-up in all major asset classes, I did believe we would see some pullbacks/consolidations along the way.  So, my preference remains for a pullback to be seen as we approach the fall.  However, until 2147SPX is broken, there will be no real pullback to speak of.
You see, in order for my preferred pullback to take hold, we need to break down below 2147 to invalidate the more immediate bullish set up on the chart, as represented by the blue count on our 60 minute chart.  And, until that level is broken, the “moon-shot” camp can prove itself should the SPX now break out over 2203SPX, with follow through over 2212SPX.  That would put us on a direct course towards the 2350SPX region in the heart of a 3rd wave.
To place some further color on my “preferred” path lower, should we break 2147SPX, I have provided an a-b-c structure for a simplified path in the green wave ii pullback.  However, I suggest we remain focused on the fact that any pullback will likely be an opportunity to add long positions for the rally we expect to follow and take us to the 2500+ region.  But, if the more immediately bullish camp is able to prove itself over the coming week or two, then I would suggest you not fight it, as the implications are for significantly higher levels to be seen a lot sooner than many believe.

LONGTERMSPX

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