In our replace from final week for the (SPX), see , we “anticipate[d] a pink W-ii quickly, ideally right down to $3875+/-25, earlier than the pink W-iii to ideally $4275+/-50 kicks in.“
Again then, the index was at $3997. It topped at $4015 earlier this week and dropped to $3885 yesterday. Thus far, so good. Now the index is staging a rally. Thus, the primary query is whether or not the correction is full or not.
Earlier than we reply that query, for these not accustomed to my work, I primarily use the Elliott Wave Precept (EWP) together with technical analyses to evaluate the market’s subsequent more than likely strikes and the place it ought to high and backside with an affordable margin of error. As such, our major expectation has been for a lot of weeks:
“As soon as the $3800+/-70 zone is reached, …, we should entertain the notion all of black W-b has already bottomed out. From there, we anticipated the extra important c-wave rally to $4300+.” See Determine 1 under. Word C waves comprise 5 waves. On this case, the pink W-i, ii, iii, iv, and v in Determine 1. Furthermore, pink W-i, iii, and v are made up of 5 smaller (inexperienced) waves, 1-2-3-4-5, whereas pink W-ii and iv comprise three waves, a-b-c, exhibiting the fractal nature of the monetary markets.”
The SPX bottomed at $3764 on December 22, 2022, for black W-b and rallied in 5 smaller (inexperienced) waves to $4015 earlier this week for pink W-i. Due to these 5 smaller waves, we knew {that a} pullback was imminent. Moreover, usually a 2nd wave retraces between 50-76% of the earlier 1st wave; therefore, why I known as for a pullback quickly to $3875+/-25 final week.
With yesterday’s low at $3884, which is the 50% retrace of pink W-i, the index has technically achieved sufficient to think about the correction full. Nevertheless, the inexperienced “a?, b?, c?” labels present we can not but dismiss pink W-ii turns into extra pronounced and subdivided. It might probably now be in inexperienced W-b to round $3950+/-25 earlier than inexperienced W-c right down to $3820-50 takes maintain. However, if the index closes above this week’s excessive, then pink W-iii is actually confirmed, barring an irregular flat W-ii. A drop under yesterday’s low from the $3950+/-25 zone alerts inexperienced W-c? is in progress.
Thus, our conclusion from final week: “… until the index breaks again under the December 22 low, with a primary warning under $3850, there isn’t any purpose for this [Bullish, dip-rally] sample to not unfold, and the next multi-day correction ought to be thought-about a low-risk shopping for alternative,” was right.
It’s a matter of “all of W-ii is full” vs. “W-ii will turn out to be extra complicated.” We are going to know quickly sufficient as such element can’t be elucidated but based mostly on the restricted value knowledge accessible. However for now, I want to look greater short- to intermediate-term. As soon as SPX4300+ is reached, I’ll turn out to be far more cautious in anticipation of the blue C wave.
