Elliott Wave Analysis of the S&P-500 (SPX) by Sid from ElliottWavePredictions.com. Click on the chart twice to enlarge.
As shown in my last post regarding the S&P-500 (June 6), my target for the end of wave 2 black has been 1345. The week ended with a rally to 1343.32, but the upward wave structure doesn’t appear complete yet, so I think it most likely that the SPX is seeking a higher target, the .618 retracement of wave 1 black at 1369.94. There are two additional fibonacci targets at virtually the same level. The first is at 1367.03, where wave C blue will equal wave A blue times 2.618, a very common relationship. Also, at 1369.98, wave 5 pink, which appears to be extending, will equal the net traveled by waves 1 through 3 pink, also a very common target ratio for an extended 5th wave. This very tight target zone (1367-1370) looks likely to be reached about mid-week, which happens to correspond with the Fed rate decision and growth forecast announcement on Wednesday. I’ll be looking for a breakout below the trendline extending from the the extremes of waves 2 and 4 pink, as well as a small degree 5-wave structure to the downside (visable on a 5 minute chart) as strong clues that wave 2 black is complete. Movement below 1320.75 indicates that wave 3 black is underway if this wave count is correct.
The top in the SPX will likely be preceeded a bit earlier in the week by the end of a terminal upward thrust out of a “x” wave triangle in the GBP/USD currency pair. The thrust target in the Pound, using the R.N. Elliott triangle measuring techniqe is at 1.578, just 4 pips shy of a 50% retracement of the April 30 through June 1 Wave 1 (blue). Cable ended the week about 80 pips shy of that target. Once wave 3 blue commenses to the downside, it should be quite aggressive to say the least, if my wave count is correct. Check my May 9 post for the larger picture, and eventual downside target.
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