S&P Elliott wave analysis suggests more downside.

Technical and wave analysis of LNKD.
March 20, 2014
Time to be neutral in S&P
March 26, 2014

S&P has staged a downward reversal once again when it reached 1880 and above. S&P did not manage once again to close above 1880 and not only prices reversed lower, the decline as can be seen in our first chart is . 5 waves down are clearly counted in the 15 minute chart of S&P and more downside is to be expected. A three wave upward pull back towards 1874 is my favorite scenario and then another leg down towards 1840-30.


The 1860 price level is a pivotal area. A close below this area will push prices lower towards 1830-40. Short-term support is found at 1860 whereas short-term resistance at 1877.


S&P is currently unable in my opinion to stage an upward move towards 1910-20 as I do not see enough strength from the buyers to make a clear breakout. I believe that it is more probable as long as we trade below 1890 that we will break support at 1860 and will bring in a selling pressure into the market that will push the index towards 1820-30. The chart below is another chart that makes me worry being long at the current levels. Although trend in all time frames remains up, I think bulls have more to lose at the current price area. Remember that forming a top is a lengthy process and takes much more time than a bottom takes to be created. Additionally I will get a sell signal if I see a weekly close below 1826 that could bring the index towards 1750.


The weekly chart below shows me that there is plenty of space in lower price levels for a correction to move and re-test and re-energize the bullish trend we are currently in. We continue to make higher highs and higher lows but I believe April will be the month this changes. I expect volatility to rise and prices to make a downward correction over the coming weeks.


Concluding, I would prefer taking short positions with stops close by and specially if 1860 support fails. I see that more downside at least for the near term should be expected as stated at the start of this post. I believe bulls have more to lose at these levels than bears. Thank you for taking the time to read my new post.


Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.