In the following charts you will see our preferred Elliott wave count regarding the current price action in S&P. As it has been noted several times before, we believe that bulls have much more to lose in this price area near 1700 than bears. We believe that the top at 1709 is most probably an intermediate to long term top but our focus still remains in short term short trades rather than a longer term position creation. Confirmation of such a view will be given after the market has broken important lows like 1560. Until then we focus on the short term patterns and on ways to make profitable trades with small stop loss exposure.
The above chart shows the most probable wave scenario according to our view. There are other possible alternatives but will look into them if price action demands it. The decline from 1709 is most probably corrective and we believe that we are currently in a wave 2 corrective wave and more specifically we have completed wave A of 2 and are now in wave B. We expect wave B to test the lows near 1640. Ideally it would move towards 1645-47 and then back up towards 1675-85.
Our longer term strategy is to find price levels to enter short below the resistance area at 1700. Short term support at 1650 if broken will push prices towards our target at 1645-47. If the low at 1639 is not held, then expect support to be found at 1630-15. The short term trend remains down and our automatic indicators although lagging, they show increased weakness signs for all time frames.
Concluding we are bearish and we look for short term opportunities near resistance levels and when support levels fail. For more help trading this index become a subscriber today. You can also ask for one week free trial. You will see that our trades make up for the subscription cost from the first week.
As always, thank you for taking the time to catch up on my thinking.