The dramatic run up that we have seen in the S&P 500 may be coming to an end. The retracement back over the 840 level should provide sufficient resistance to reverse this market to the downside.
Now here is the caveat, our long-term indicator, the monthly "Trade Triangle" remains negative on this market. While the direction of our weekly timing "Trade Triangle" is on the sidelines and neutral. This has created a conflict, meaning that conservative traders should remain on the sidelines to protect capital.
I am looking for an area to once again get short this market and trade with the major trend in our favor.
My downside target zone is for an eventual move down to the 500 level. Only if we take out highs as I mention in the video, then this analysis will change.
I hope you enjoy this short video. I will cover two important elements in trading: the Elliott wave theory, and the other is the Fibonacci retracement levels that I like to watch and trade with.
As always, the video is available with our compliments and there is no requirement to register to watch this video.
34 thoughts on “What now for the S&P500?”
Many thanks for your feedback. I have just reviewed the video again and you clearly state that following the technical analysis with Elliott Waves, the target zone for the S&P 500 is 500! That due to the fact, that S&P500 didnt reach 943.85 last month.
No offence, but this really does put your market analysis into question when you claim such a thing. Did you get your counts wrong, or what do you think went wrong? I just disagree when something is predicted to occur when all the intermediate targets do occur, but the markets still continue to rise in the opposite position as predicted.
Maybe you should be more prudent and state in your videos that this is the way you hope things to go (and not WILL go)... as a bit less convincing and a more defensive and realistic approach?
It is amazing how nobody is interested in this! We are now in May, didnt reach 944 and are heading to TZ 500 if the video forecasts correctly!! That could be a tremendous short trade!
Is it because nobody believes in this posting, or is just nobody bothered to take the risk?
Adam, now would be a great time for you to intervene since you are back from your break and hopefully have recovered from your bungy jump 🙂
My apologies for not getting back to you sooner. I just missed your post.
Certainly the S&P is in a conundrum state, the fundamentals are terrible yet the market remains firm. So what is a trader to do?
Our trade triangle technology which is totally based on the technical merits of the market is still in the positive phase. We would not want to go against this indicator.
The market has changed since we made our target zone of 500 on the S&P index. Should the S&P index move below the 878 level, we would consider a short position. Up until then we are still in a broad trading range was an upward biased.
Thanks for your comment. Every success in the market.
Hello Guys, is nobody interested in this? We didnt make 944 in the S&P500 - so we are heading for TZ 500 if this analysis is correct!! Adam is away this week, so what are your comments seeing as today was the last day of the month???
Next week the month ends, still either SPX 944 or else target 500!?
943.85 SPX has not been reached and it looks like a correction is overdue. So, in your mind, do you really think that it is now going to crash to TZ 500 since 943.85 has not been reached yet this month?
I appriciate the video.
One look @ a longer term chart of the S&P shows the price pattern from 1982 is still completing 5 waves up. The March 6th low just completed wave c of an ABC flat the flat started in the year 2000. Wave 5 up most likely to new highs has started. Hang on boys everyones is scared to go long
It is amazing almost all wavers are paralized by fear & can not trust in thier eyes.
Thanks for the video. In reply to Glenn its very hard to determine which wave down we are in. Over last few weeks I have been listening to chartists, fundamentalists and others . Somethings that both have in common is that if the economy improves there is a chance of inflation (which i do not necc. agree) and also increase in gas which may again cause a bear market and we can see the S&P below 600 then if that happens. If that happens then the elliott wave chartists and some fundamentalists are in sync.
HSDent has been predicting depression 2 in the coming years . Lets see if that really happens.
Hi..your comment regarding wave 3 is not quite correct..only rule that pertains to Wave 3 is that it CAN'T be the shortest of the impulsive waves..does not mean it's the longest.
You're correct. See my earlier comment.
Thanks for contributing to the dialogue.
All the best,
Thank you for the SPX analysis Adam. Agree, decision point here is tough. Thats my signal to Step Aside and watch Candles ( short term sentiment closely). Have been Day Trading for the last two months (definitely not my first preference) but multiple small intra -day trades
have worked very well. Most importantly it does help keep me sharply focused on what the institutions are doing - quietly buying and trying very hard to stay off the radar. Regards.
Sometimes I think it really doesn't matter which stock you short or buy, what matters most is something difficult to do: the ability to relentlessly cut your losses and let your winners ride, plus the ability to take many little losses and not be discouraged. (It's like sales where you have to take many "nos" before you get one "yes.")
That being said, the monthly and weekly triangles at Market Club are the best indicators I have yet seen. The dailies, not so much - if the market is not trending strongly, you can get whipsawed. My growing conviction is that you are better off to put your money down on the weeklies as soon as they show up, with judicious stops, and ignore the dailies.
Nevertheless and notwithstanding, we all keep looking for indicators that will make us rich. Me too. Right now I am looking at ichimoku and if you have tried this system, or know something about it, Adam, I would appreciate your assessment.
Thank you for what you said about trade triangle technology. It is always nice to hear someone who's enjoying and making money with our tools.
All the best to you.
On the Video, how did you determine the S&P 5th Wave target to be 500? I believe we will test the lows because economy is really getting ugly now and not better. Earning Reports should be a disaster in the next few months. I don't think Obama has a clue what he is doing, and the anger rate is really high right now, especially among small business owners, as well as corporate executives.
The 500 downside target for the S&P was not determined from the fifth wave target. If it were then I would have count wrong, as the fifth wave is always shorter than wave three.
The downside targets for the S&P 500 was taking from the double top and the pivot point on the index. This measures down to the 500 level.
I hope this helps clear up that question.
All the best,
I found the Elliott Wave Theory to be very unreliable.
"It does not provide certainty about any one market outcome; rather, it provides an objective means of assessing the relative probabilities of possible future paths for the market."
Bob Prechter, EWI founder and President, has had some success but a lot of failed projections
The problem has always been in the wave analysis is getting the count right. It is very difficult to do sometimes at other times it's as clear as a bell.
That is why I believe that reading charts, Fibonacci tools, Elliott wave's and so on is more of an art than a science.
All the best to you.
What you say seems plausible. My only question is that the MACD clearly shows a divergence to your theory. Recently, the MACD made higher lows while the SPX was making lower lows....how does this come into play with you thought of heading towards 500 on the SPX?
As you clearly pointed out there is a convergence between the MACD and the market. I prefer to look at our longer-term indicator which is our monthly trade triangles which remain in the negative mode at the present time.
As I answered earlier sometimes when there are too many technical tools to use one can get confused and become frozen in one's actions.
All the best to you.
I really liked your S&P 500 outlook, I look for wave 5 to be near 460 low pointso we are pretty close ( what is 50 give or take). Can we someday have Elliot wave capability on the charts?
Thanks for the great videos.
I would love to see that happen, it is a very hard technically to program Elliot waves into a chart. Having said that, nothing is impossible.
Thank you for your comments and kind words.
All the best to you.
You mentioned that if the target of 943.85 is not met THIS MONTH, then we would move down to approximately 500.
Why this month? Why can't the target of 943 be met by the end of the summer or so?
It all has to do with our trade triangle technology and in particular our monthly trade triangles.
I suspect that we will see the 943 number come down dramatically as we move into the month of May.
We're looking for markets to be somewhat choppy as it digests all of the news that continually comes out everyday. I believe what we have seen is a classic rally in a bear market. If that is true then we will see a resumption of the downward trend in the equity markets.
The QQQQs are now showing a Monthly green triangle, does this mean the longer term trend is long ? Does this not conflict with the other broader indexes like S&P and your target for 500 (assuming the indexes are more or less in tandem)
I'm sticking with the S&P plan. I still have a a target zone down to the 500 level. As I say in the video unless the 943 level is taken out in the month of April I want to stay with that forecast.
Thank you for contributing to this blog.
Thanks for this new video. I agree with you on the final target, I personally expect something between 400-500 on SPX (it might not happen).
Anyway, for Elliot Waves, there are numerous counts available; some argue we are in a bigger fractal right now and we actually had 5 waves down. A bigger fractal would mean we have a "bigger correction" to the upside compared to what we saw during last year, but nothing stop us to have another 5 waves down after we finish this. So a bear market is not 5 waves down and we're down. In '29, we had 9 waves down if I'm not wrong.
Thank you for your feedback and comment. The only way the theory as I understand works is that you have three waves in the direction of the major trend and two counter trend waves.
Wave one is in the direction of the major trend.
Waved two is countertrend move.
Wave three is the longest wave in the direction of the major trend.
Wave four is a countertrend move.
Wave five is the the fifth and final wave in the direction of the major trend.
In between the various waves you can have ABC corrections and mini sub waves.
Elliott wave theory is more an art and not a science.
I had a Machine shop in Chicago and in the 60's made an several hundred Elliot Wave tools for brokers. Never used one myself. Good to finally know how they were used.
Thank you for your feedback.
Chicago's a great city I am very fond memories of living there and trading of the exchange.
All the best.
Just a comment on EW theory. I believe that the correct way to express Wave 3 is that it is never the shortest of 1, 3 & 5. It usually is the longest. Trying your new product. Like it so far. Recommending it to others who are new to the market.
You're absolutely right, wave three is never the shortest wave and it is usually the longest.
Thank you for taking the time to offer you're valuable insight.
Your 4th Wave is violating your first. This count has pretty much been discarded by everyone out there because of this basic violation of the theory.
Couldn't the high be 9/19/08 at 1281. This would give us a 972 zone for our 50% retractment.
Thanks for your feedback.
Please see my comment below to Dacian.
I think somewhere along align yes you could be looking at the 972 area as a 50% retracement.
All the best,
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