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Is S&P 500 Still On Target For 4300+?

By Dr. Arnout ter Schure Stock MarketsAug 09, 2022 03:40PM ET
www.investing.com/analysis/is-sp-500-still-on-target-for-4300-200628286
Is S&P 500 Still On Target For 4300+?
By Dr. Arnout ter Schure   |  Aug 09, 2022 03:40PM ET
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In June (see here), I warned of a potential bullish wedge pattern on the S&P500 (SPX) targeting 4300+. I followed up on that analysis a month later (see here) as the index confirmed the pattern by breaking out. The upside target remains ideally at SPX4365-4530:

a 62-76% retrace of the entire Year-To-Date Decline … if the current six-month-long diagonal pattern completes, I expect the rally to last longer than a few weeks.”

Yesterday, the index reached SPX4187, only 4.1% below the lower end of the already June projected upside target. So far, so good, but does this mean the counter-trend rally is over and a new bear market leg down has started? 

Figure 1 below shows the bearish Elliott Wave Principle (EWP) option I am tracking alongside a bullish one (not pictured).

Despite a smaller 4th and 5th wave pattern higher, SPX4250+ cannot be ruled out just yet because a-waves can be either made up of three or five waves. Therefore, the index can have complete (black, major) wave-a of a larger (blue, Primary) wave-B bounce. 

B-waves always comprise only three waves: a-b-c. And while the index may have already completed a wave B, the recent breadth thrusts (see here and here) suggest odds favor more upside. 

Per this bearish EWP count, I am looking for a multi-day, overlapping pullback to the ideal lower black, boxed target zone (SPX3900+/-100). 

The next leg should kick off to around SPX4350, but possibly as high as SPX4500-4600 (the higher black, boxed target zone). Please note that the vertical lines represent time symmetry; it took 114 days from top to bottom, and I, therefore, expect this potential bounce only to last longer than the current two months.

Is S&P 500 Still On Target For 4300+?
 

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Is S&P 500 Still On Target For 4300+?

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Comments (15)
Sam Li
Sam Li Aug 11, 2022 12:22PM ET
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Thanks Dr Schure, do you think the pullback would still happen? or it will just go straight up further?
Pauline Nguyen
Pauline Nguyen Aug 10, 2022 8:05PM ET
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So basically a pull back to 3900 and next level up???
András Varga
Bandi Aug 10, 2022 3:26AM ET
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Dear Dr.! Thank you for your article again! What is your current odds of SC IV is underway?
Dr. Arnout ter Schure
Dr. Arnout ter Schure Aug 10, 2022 3:26AM ET
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50/50
Harrsha Suri
Harrsha Suri Aug 10, 2022 1:44AM ET
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thanks for the education and the ideas
Zman Trading
ZmanTrading Aug 10, 2022 12:32AM ET
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You are basically saying either up or down from here…. Maybe you could add probabilities for the different directions.
Dr. Arnout ter Schure
Dr. Arnout ter Schure Aug 10, 2022 12:32AM ET
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As usual when people say “all you say is it can go up or down” is in part because of confusing the short-term variability and lower odds with the clear intermediate-term direction. In this case higher. It is simply short-term a matter of how that will resolve: more variability. Intermediate term remains pointing higher!
King Agamemnon
King_Agamemnon Aug 09, 2022 7:26PM ET
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166008736353156.jpg
Rarely do markets crash in August. So when I see all these bears calling for a pivot off the recent highs ahead of 4200 that makes me think a short squeeze is in order. Therefore I agree that there probably lots more upside in store, with first target 4300. But, your 4500-4600 seem to be probable as well especially if the squeeze really gets going. I have my support levels posted here, and prefer not to see S&P close below 4080, if so the last line of defense is 4000
Adam Cu
Adam Cu Aug 09, 2022 7:26PM ET
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could be a double top too.
Sabi Sab
SabiSab Aug 09, 2022 7:26PM ET
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Nope, it did in the summer of 84, during the famous oil crisis. Slow torturing dive day by day. I Googled and pulled those charts out.
King Agamemnon
King_Agamemnon Aug 09, 2022 7:26PM ET
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Sabi Sab  Key word is rarely. So as I betting man I do not bet on rarely.
King Agamemnon
King_Agamemnon Aug 09, 2022 7:26PM ET
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Adam Cu  I'm seeing slow steady consolidation and grind upwards into resistance in the dead volume of summer so I think this would be very weak resistance.
Tony Huynh
Tony Huynh Aug 09, 2022 6:46PM ET
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So everyone here is bearish? I guess the correct play is to inverse them then.
Sabi Sab
SabiSab Aug 09, 2022 6:46PM ET
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If you look at the fear/greed index, it's right at 50.
Steve Bojo
Steve Bojo Aug 09, 2022 6:17PM ET
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Nope. Overall trend is down
TALLURI ANJANEYULU
TALLURI ANJANEYULU Aug 09, 2022 6:01PM ET
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UNLESS IT MOVES&TRADES ABOVE 4178 LEVEL WITH VOLUMES NO UPTREND EXPECTED
TALLURI ANJANEYULU
TALLURI ANJANEYULU Aug 09, 2022 6:01PM ET
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UNLESS IT MOVES&TRADES ABOVE 4178 LEVEL WITH VOLUMES NO UPTREND EXPECTED
 
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