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Bears In Charge Of S&P 500. What’s Next?

By Dr. Arnout ter Schure Stock MarketsSep 14, 2022 09:32AM ET
www.investing.com/analysis/bears-in-charge-of-sp-500-whats-next-200629818
Bears In Charge Of S&P 500. What’s Next?
By Dr. Arnout ter Schure   |  Sep 14, 2022 09:32AM ET
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In my last update (see here), I showed that the S&P 500’s immediate bullish upside path had been denied and, with that, two primary possibilities were forming:

  1. Rallying the index above last week’s low (SPX 4120) will lock in an a-b-c pattern, as already shared in early August (see here). Then we should expect [a] c-wave to ideally around SPX 4550.
  2. The current price action is a (rare) expanding leading diagonal. It means the SPX should now be in (grey) minute wave-iv, followed by wave-v to complete (green) minor wave-1. Minor waves 2, 3, 4, and 5 should follow, as shown in Figure 1 below.

I concluded by stating:

“If the bulls can push the SPX back above $4120 …, then EWP option [1] is operable. If they cannot, and the bears manage an impulse lower from the August high, the[n] path [in option] 2 becomes preferred.”

Figure 1. S&P 500 daily chart with detailed EWP count and several technical indicators

The index topped that same day right inside the ideal (grey) W-iv target zone (SPX 4105+/-15) at SPX4018 and dropped the next trading day to SPX 3887, which was a bit short of the ideal SPX 3800+/-50 target zone for the (grey) W-v.

Nothing says markets must always follow perfect, standard Fibonacci-based Elliott Wave Principle (EWP) patterns. Besides, once the (grey) W-v would complete (green) W-1, I was looking for a bounce back to around SPX4050 for green W-2, followed by a sharp W-3 to the downside.

Yesterday, the index took a horrible sharp turn lower. Thus, it appears most likely that option 2, as now shown in more detail in figure 1 above, is in play.

A break below the early September low of SPX3886 then opens the door for the impulse pattern as shown with an ideal target zone of SPX 3515-3400 for (green) W-3/c, then a potential W-4 rally back to ideally SPX3675-3785 followed by the last drop to ideally SPX 3230-3330 to complete W-v od W-c of W-A.

There’s a slight nuance to this overall bigger picture W-A, but the anticipated path and downside targets are the same. Hence, I will share it once we get there.

Bears In Charge Of S&P 500. What’s Next?
 

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Bears In Charge Of S&P 500. What’s Next?

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Comments (15)
Edith Castro Bravo
Edith Castro Bravo Sep 21, 2022 9:08PM ET
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Dr. Arnout,  The graph you presented for the Nasdaq was really good! I could clearly see when the next rally was going to happen. It was very helpful. On this one however, I find difficult to see if there will be a rally at all in October or in the near future, when I look at this graph it gives me the impression that everything will be downside up to December, is this right? so nothing interesting will happen in between? after this rally in December, there will be more downside starting 2023?
Dr. Arnout ter Schure
Dr. Arnout ter Schure Sep 21, 2022 9:08PM ET
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Thank you! Please know, I don't present anything accurately in time. I simply work with the space available to keep the charts still relevant, understandable, and legible.
NIKHIL PUSALKAR
NIKHIL PUSALKAR Sep 15, 2022 12:36AM ET
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Hey, you have started getting your wave count right again. Your final target zone is perfect, except I suppose it should not breach 3234 (W-2 low).
Murali Krishna
Murali Krishna Sep 14, 2022 11:26PM ET
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This guy makes sense. just leave him alone to write what he wants. Finding out what will happen next is so easy
Ray Steed
Ray Steed Sep 14, 2022 10:30PM ET
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so basically if the market does not go up it goes down. brilliant
TALLURI ANJANEYULU
TALLURI ANJANEYULU Sep 14, 2022 8:53PM ET
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ABSOLUTELY YOU ARE CORRECT W.R.T TECHNICALS.
Jim Gambon
Jim Gambon Sep 14, 2022 7:35PM ET
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He tells you what he sees in the shapes of clouds in the sky. Wait ...now it looks like a bunny.
Jim Gambon
Jim Gambon Sep 14, 2022 7:34PM ET
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He tells you what he sees in the shapes of clouds in the sky. Wait now it looks like a bunny.
Nick Green
Nick189 Sep 14, 2022 7:01PM ET
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amazing analysis!
Mike Sim
Mike Sim Sep 14, 2022 6:33PM ET
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The laughing stock of https://investing.com
Sharif Almeida
Sharif Almeida Sep 14, 2022 4:06PM ET
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Dr Schure is back in the office. And this time finally the doctor has prescribed the right medicine for the markets consistent with the macroeconomic headwinds and pending QT.
 
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