The newall time high in S&P has made us re-think and examine the Elliott wave count for the entire upward move from 1343. The rise was looking complete until prices broke above 1574. This upward thrust made some critical changes to our wave count and the resulting wave count was very bullish. Below you can see the daily and 60 minute charts with the updated wave count.
In previous posts we were troubled by the overlapping rise in S&P from wave a bottom to wave b high. Overlapping patterns are usually corrective. The fact that this overlapping pattern gave a new high above the previous 5th wave was a bullish sign of strength. The declining wave c was expected but at that time it looked more like a new downward move was starting. We were expecting the start of a big decline because 5 waves up were complete and our target was 1470-90 area. In the process however, prices did not unfold in an pattern and did not break important support at 1538 level. The decline was not a clear impulsive and this usually means correction. Breaking above the intermediate high of the 1574-1539 move was the line in the sand for bulls. Once buyers managed to push prices higher, a new high was only unknown when it would come. Our new wave count here implies that the wave that started from 1485 is only wave (1) of 5. According to this wave count prices are expected to continue to rise for some time. This super bullish wave count will only be valid as long as prices don’t break below 1538.
It’s an extreme call to make, this wave count, but one have to be impartial. I believe that as long as one respects support and resistance levels, risk will be minimised. Although we were bearish at 1570 we respected the fact that support at 1538 was not broken and closed half our short position. A bullish signal was given once 1564 was broken upwards. Now we remain bullish as long as support at 1538 is held. If that support fails, we will re-examine the wave structure accordingly. Long positions will be considered in a pull back with 1538 as stop. For more help trading this index don’t hesitate to contact us. Try our one week free membership and see how we add value to your trading.
As always, thank you for taking the time to catch up on my new post.