Dear Traders,
the S&P 500 showed renewed bullish strength and is at a point where new highs could be on the horizon once again. This post will provide a short-term technical analysis.
The S&P500 has produced powerful advances to the upside over the last two trading weeks. The many strong daily candle closes (at, or very close to the highs) is usually a signature of a wave 3 in action. This is quite plausible from an Elliott Wave perspective as the previous price action (within the two white converging trend lines) can easily be counted as a leading contracting diagonal. Combined with the powerful bullish momentum that followed this structure, a wave 3 scenario is becoming a prime candidate.
In addition, technical factors used within the SWAT system also suggest that further gains and new record highs are still on the cards:
Even if the structure since Jan still requires some more sideways movements before it is complete (which i see as having lower odds due to the latest bullish price-action momentum), the way is highly likely leading upwards still for US equities, in spite of the fact that we are the very late stages of medium-term trend.
All the best along your trading journey
Hubert
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PLS share your count from corrective wave 4?
Hi Morris. I see it as a zigzag into the Feb 09 low, another zigzag into the Feb 27 high, and then an expanding flat into the Apr 02 low, thereby creating a double three (wxy) within wave 4. There is also an option that it could morph into a triangle still, but this analysis was giving more weight on technicals than on elliott waves alone.
Cheers
Hubert