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S&P500: A Look At Short-Term Elliott Wave Count

By Dr. Arnout ter Schure Stock MarketsDec 08, 2020 02:42PM ET
www.investing.com/analysis/sp500-a-look-at-shortterm-elliott-wave-count-200547235
S&P500: A Look At Short-Term Elliott Wave Count
By Dr. Arnout ter Schure   |  Dec 08, 2020 02:42PM ET
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Over the past several weeks, I kept you informed about how the S&P 500 was setting up. Now, it is most likely on its way to SPX 4000+. Last week it bumped into SPX 3675 resistance four times, red arrows in Figure 1, but managed to break above it on Friday. What once was resistance may now act as support, and the index has retested the SPX 3675 zone three times already this week (green arrows). So far, it is holding, and as long as it does, we can expect SPX 3715+/-5p next.

Why?

That is the simple symmetry breakout target (blue dotted arrows), just like the breakout above SPX 3595 and successful retest thereof lead to the rally to SPX 3645+/-5P (purple dotted arrows).

Figure 1:

S&P 500 Hourly Candlestick Chart.
S&P 500 Hourly Candlestick Chart.

This “stair-stepping” behavior is normal bull-market behavior: breakout, retest the breakout successfully, move higher to the next symmetry/Fibonacci-based price-level. Thus, the bears were unable to close the index below SPX 3640 (see last week’s article here) and, therefore, we can now move those “watch-out-below“ levels up by one step to SPX 3675 and SPX 3645. As a trader, one can, for example, move up stops on any index-related long positions accordingly.

Besides, the grey, green and red arrows show the preferred Elliot wave principle (EWP)-based path as we advance (not accurate in price and time). The index bottomed late-October for (black) major wave-4 and is now in major wave-5, which consists of five smaller waves: (Red) intermediate waves i, ii, iii, iv, v. So far, only (red) waves i and ii completed. Intermediate wave-iii is now, ideally and preferably, under way as long as the support levels mentioned above hold.

Since markets are fractal in nature, this red intermediate wave-iii is made up of five smaller waves: (green) minor waves 1, 2, 3, 4, 5. Etc. Based on my internal waves assessments, the index is now in (grey) minute-iii of minor-3 of intermediate-iii of major-5. The grey, green and red dotted arrows show the ideal path going forward to complete major-5, which is the last larger wave up from the March low struck this year. It should end in the spring of 2021 at around SPX 4000-4200. After that, we should see a very sizable correction.

S&P500: A Look At Short-Term Elliott Wave Count
 

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S&P500: A Look At Short-Term Elliott Wave Count

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Comments (5)
Gordan Flego
Gordan Flego Dec 10, 2020 3:57PM ET
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Hello. How do you comment how index performed today. It went lower than target dor wave iv, but second support held. Should we get back to drawing board or this is still in tolerances for wave iv?
Robert Barberesi
Robert Barberesi Dec 08, 2020 9:52PM ET
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I never post on these articles, but I always agree with your analysis (usually because we end up both being right). I have the same dynamic for the SPY going into January with a major top happening in January.
Dr. Arnout ter Schure
Dr. Arnout ter Schure Dec 08, 2020 9:52PM ET
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thank you! I have no way to see your work/analysis, so I will take your word for it ;-)
Ashish Bhura
Ashish Bhura Dec 08, 2020 6:20PM ET
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Nobody know about correction whatever analysis being applied
ECL SALES
ECL SALES Dec 08, 2020 2:51PM ET
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Good analysis Doc.
Dr. Arnout ter Schure
Dr. Arnout ter Schure Dec 08, 2020 2:51PM ET
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thank you.
ECL SALES
ECL SALES Dec 08, 2020 2:50PM ET
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100% higher than the March20 low might be a better target.
ECL SALES
ECL SALES Dec 08, 2020 2:50PM ET
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4400. And in the bubble case 5000 by April21
 
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