With the index more than 150 points higher from the 2018 lows, after breaking out of a consolidating triangle, sentiment (thanks to Italy) is very bearish equities (at least from my point of view). Elliott wave wise I have previously mentioned this triangle scenario and that the entire consolidation could be a huge wave 4. I believe that it is more probable to say that this triangle is complete and that we already have started to make an impulsive wave higher.
I believe we are currently in wave 2 and there are many chances it is also complete. Price back tested the broken triangle. If S&P 500 moves below 2685 then wave 2 is not over.
A break above 2740 will confirm wave 2 is over and we are starting wave 3 higher of the first impulsive wave. According to this wave count I see S&P 500 hitting new all time highs this summer.
The 2610 level remains key for this scenario to come true. Even with a more complex correction, I can only see S&P 500 fall to 2630-2650 max. Bulls do not want to see 2610 support being broken. If this happens, then the 23.6% Fibonacci retracement in the monthly chart as shown above will be our first target. Until then I remain bullish.
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