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Sunday, December 7, 2014

Elliott Wave Analysis of the SPX

I posted a short term count on StockTwits a few days back see here:


It never spiked higher as I thought it might, it appears that it could be morphing into a small wedge, we call that an ending diagonal, if that is the case, it can suggest a termination to the rally that start from the October 15th lows. Ideally if I had my way we would see a minor high, then a strong reversal, if a strong gap down under 2060SPX that would support the idea of a potential peak in place.

I am still working the idea that the move that started from the October 2011 lows is potentially coming to an end, that would suggest a significant decline is setting up. A decline that I think will surpass the move we saw in September - October 2014. Already I reading the same sort of comments that I was reading at the Sept highs, I was looking for a significant decline back then.

With the market struggling to break above the upper trend line, it think its a sign suggesting a decline is setting up. In a trending market, 4th waves tend to spike under the lower boundary of the trend channel only to see it move to the upside to finish a 5th and final wave.

So the September-October 2014 decline I think is a larger 4th wave and we are now likely in a 5th wave.

I am targeting the 1800 - 1750SPX area as the initial 1st target