Breaking News

S&P 500 Tops 1923, Now What?

By Dragonfly Capital (Gregory W. Harmon)Stock MarketsJun 03, 2014 07:47AM ET
S&P 500 Tops 1923, Now What?
By Dragonfly Capital (Gregory W. Harmon)   |  Jun 03, 2014 07:47AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

I have been using this monthly Elliott Wave chart on the S&P 500 as a guide for nearly 4 years now. Pulling it out occasionally to remind traders of the big picture and how far the trend can run. Back in November 2010 I measured a 161.8% extension of the first leg higher after the financial crisis to get a possible target of 1923 for the S&P 500. This was a high level analysis. It has now hit that target. So is it time to sell everything? No, not yet. Keeping it high level here are a few reasons why.

S&P 500
S&P 500

  1. The market is still rising. Why would you sell stocks that are rising? You should already have stops in place. Just continue to honor them.
  2. The 161.8% extension is just a guideline. Elliott Wave enthusiasts know that Wave (III) is usually the longest, but there is no rule that it cannot be 200% of Wave (I) or even more.
  3. Wave (IV) was drawn as a 50% pullback of Wave (III), but this is likely wrong. Enthusiasts again would know that Wave (II) and Wave (IV) tend to have different character. If one is corrective the other tends to be flat. So as Wave (II) was corrective in this case, Wave (IV) would be expected to be flat.

Elliot Wave would suggest that when the end of Wave (III) is reached then we can expect some sideways action for a while before a Wave (V) thrust higher. None of this is a guarantee, but do you really want to just blindly sell now?

There are many other features here that you could use to analyze this chart. But keeping it simple and high level, it is not time to sell yet.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.


Original post
S&P 500 Tops 1923, Now What?

Related Articles

S&P 500 Tops 1923, Now What?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post also to:
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.