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With S&P 500 Bullish Wedge Target Of 4600+ Reached, What's Next?

Published 03/29/2022, 05:19 PM
Updated 07/09/2023, 06:31 AM

Over the past two weeks, I kept you abreast of the bullish wedge forming on the {{166|S&P 500}, which pointed toward SPX 4600+. See here and here.

Fast forward, and the index is already at SPX 4630s. Thus, if one used my objective, fact-based forecast and bought the breakout on March 16, one would already be up a nice +6% in the SPDR® S&P 500 (NYSE:SPY).

So what's next?

Figure 1. S&P 500 daily line charts with technical patterns and indicators:

S&P 500 Daily Chart.

In my last update I mentioned:

"The 50- and 200-day Simple Moving Averages (SMAs) at SPX 4437 and SPX 4470, respectively, should provide some resistance, but based on my Elliott Wave Principle (EWP) work, I expect the stock markets to have put in a lasting bottom and that a subdividing five-wave rally to SPX5500-6000 is now under way."

Last week the index gyrated around the 200-day SMA for several days, held the 50-day SMA as support, and took off last Thursday. Today's move over initial resistance at SPX 4600 (the late January and early February spike highs) opens up a clear path to the next resistance zone at ~SPX 4700 (horizontal blue line), which equates to the October and November 2020 highs. Support is now at previous resistance: ~SPX 4600. Given that all the technical indicators are firmly pointing higher, without any negative divergences or sell signals, looking higher is the preferred path forward.

Bottom Line: Over the last two weeks, I shared how the SPX was exhibiting a bullish pattern, called a falling wedge or an ending diagonal C-wave in EWP terms, and I "therefore … expect[ed] to top out at 4600+/-100, a pullback to around 4400+/-100, and then a rally to SPX5100+/-100." So far, so good. And it appears, based on the rally's strength, that SPX 4700 is next.

Latest comments

Dear Michael, you are missing the point entirely. I don't expect anything from anyone, it's all a risk but I've been a member of the Docs PAID FOR forecasting services and it's impossible to make money from his "advice". The basic principle being he will forecast the market to move in one direction UNLESS it moves heavily in the other direction. And will therefore pretty much always claim he is right. And anyone who reads these articles or joins his paid for service will see the same pattern repeated over and over again. And on another note - check out the Ishan Iyer advert and still tell me this is a credible individual.
Also, full disclosure, no collusion. Never met or communicated with the Doc. Have been in the business for 20 years, for whatever that's worth.
Oh Adam, why so angry? I think I know...You're the guy that loses shirt in the market due to always letting emotions dictate behavior. We've seen your movie. So the 4700 was supposed to happen the very next day or day after, the market should be a straight line in Adams world. Technical analysis and trends, that's all this is. The SP can and will have down days while in an uptrend, and vice versa. Of course he is working with ranges inside of trends and patterns. Also, he could still be very wrong. Early on he made bullish calls on SP, if it had reversed course to test new lows, 100+/- doesn't cover that. Let me guess, you want exact prices on exact dates? If you believe in that, you're in big trouble pal and should hand your portfolio over to a professional. Facts are no one can time the market with consistency, that's why it's time in the market. Yet, if you're looking for an indicator or technical cue to place bets on, maybe this info can be useful. If not for you, no need to cry.
You must be one of the Docs stooges Michael! His parting words in this article were "4700 is next". Cue the fall in price 2 days later to a close of 4530. But he cant be wrong with all these +/- 100 points caveats!
The negative comments are entertaining. Regardless of predicting exact price points which no one in the world can do. Although his ranges have been pretty spot on. Big picture is the Dr. has been putting out bullish calls despite the massive amounts of negative sentiment, bearish headlines and pundit fear mongering we see and read every day. He seems to focus on what the technicals tell him which negates emotion and personal opinion. If you don't buy the process, don't follow it. No system is ever perfect. The market is quite often counterintuitive, if it wasn't we wouldn't be here. I'm just suggesting that before you nitpick his words and analysis to death, consider that you can't do better. Or put your money where your mouth is and post your own analysis and process. No one will read it but might prove cathartic. Novel idea, maybe we could use the comment section for thoughtful questions or insight, not mindless blubbering about your baseless uneducated opinions. Cool, thanks Doc.
Dr. ter Schure, you wrote on 3/29 that we have a even more upside coming, how does it affect your wave analysis?  Is it extended wave 5, of a larger wave 3?
It isn't 2% though as the market isn't going to go up or down 4000 points! It's more like 100% as you are predicting rises/falls of 200 points with a 100 point safety net either way i.e. 200 points. So it's impossible for you to be wrong and impossible to trade!
All this +/- 100 means there is a lot of overlapping going on which in turn means you will claim you were right whichever way it goes. Same old story with you really. Should go up a lot unless it goes down a lot.
For someone who doesn't like my work, I must say it is hilarious to see you keep reading it... It's like "man I really don't like this beer, but I keep drinking it anyway." How stupid does one have to be? And I apologize for my 2% inaccuracy. I know, it's horribly inaccurate. So, if you can do any better, please enlighten us all and provide the highs and lows within the actual cent. OK?! If you cannot -and I am 100% certain you cannot- then shut up.
Assist with RUT & USO please.AAPL just completed 11 positive days, best in 19 years.Time for IWM.
With an aggressive tightening ahead, you don't fight the Fed. That small 25 bp rate hike was only done not to spook investors but 50 bp hikes are coming soon
Because stocks took off, bonds capitulate. bond money goes into stocks. but as bonds capitulate even more, stocks will sell off to move money into bonds locking in higher rates
what about all the negative headwinds? the bond market has capitulated over the same period the market rallied. typically bond market leads the stock market. reason being is because bond investors are more conservative.
This move to 4600+ is a short covering rally setting up to take out 4100 low and correct towards 3200. 4600+ happened for several reasons such as Ukraine peace talks, end of a quarter, and April 15 rush to buy stocks. According to my EWP analysis, this is a typical set up for bigger drops. 4400 is an insignificant number here.
Don't trust this guy Jeff. he has never been right so far and will never be.
when the vix collapsed it triggered a wave of buying which was supported by positive war news, but the reality is that inflation is still around 10% and with commodities remaining elevated to Russian sanctions, inflation will remain higher for longer. the real rate is still negative. I belive the fed will have to raise way higher than the 3% they are forecasting now. just remember only 3 months ago inflation was only "transitory"
 How can I "never have been right" when my call for 4600 two weeks ago was right?! Can't argue with stupid as they say. Good luck with your wrong EWP count.
What I learned here is 4400 before 5100. I can trade that.
great work, thank you. it appears that you are no longer looking for a pullback to around 4400 but rather a move to around 4700. is my understanding correct? thanks again.
Hi Rick, thanks for the positive feedback. Unfortunately, your understanding is not entirely correct. Namely, as said last time and restated at the end of this article "therefore … expect[ed] to top out at 4600+/-100, a pullback to around 4400+/-100, and then a rally to SPX5100+/-100.". Thus, 4700 is -obviously- within the 4600+/-100 range and a pullback to 4500-4400 should IMHO still happen before rallying again. That remains my preferred POV until proven otherwise.
 speak for yourself, Steve. Learn from Rick who started off with "great work, thank you". Did your mom never teach you to be respectful and thankful, or are you also one of those entitled people?
thank you once again. I appreciate your work and your reply.
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