SPX paths forward
Two main paths forward:
Yellow count: We are working on the (C) wave of an ABC correction down from the January high. We are currently in wave 4 of (C), which can peak from 3780 - 3840 before turning down. Final target for wave 5 of (C) is 3410 - 3325, with the potential to hit 3250, which is the 0.5 retracement of the COVID low to the January high (shown in blue). We can dial in a more accurate target for 5 of (C) when wave 4 peaks. Once wave (C) finishes, we should have a substantial bounce in a higher-degree B wave.
Red count: We are still in the (B) wave of an expanded-flat ABC correction down. The August high was the A wave, the September low was the B wave, and we are currently in the C wave up to complete the (B) wave. The C wave will be a five-wave move, and we are on our way to completing wave 1 of C, which should terminate at 3850 - 3885. Final target for the C of (B) is 4325 - 4510, which is the 0.618 - 0.764 of the retracement from the January high to the June low. Once the (B) wave completes, we will have a (C) wave down to new lows.
In the Yellow count we are very near to peaking--if we haven't already,--and should turn down soon to new lows. This is short-term bearish, but portends an intermediate-term bullish outcome. If we decisively break 3840, then we are more likely in the Red count, which is short-term bullish and intermediate-term bearish. In either count, it is unlikely that we see new all-time highs for a while.
Yellow count: We are working on the (C) wave of an ABC correction down from the January high. We are currently in wave 4 of (C), which can peak from 3780 - 3840 before turning down. Final target for wave 5 of (C) is 3410 - 3325, with the potential to hit 3250, which is the 0.5 retracement of the COVID low to the January high (shown in blue). We can dial in a more accurate target for 5 of (C) when wave 4 peaks. Once wave (C) finishes, we should have a substantial bounce in a higher-degree B wave.
Red count: We are still in the (B) wave of an expanded-flat ABC correction down. The August high was the A wave, the September low was the B wave, and we are currently in the C wave up to complete the (B) wave. The C wave will be a five-wave move, and we are on our way to completing wave 1 of C, which should terminate at 3850 - 3885. Final target for the C of (B) is 4325 - 4510, which is the 0.618 - 0.764 of the retracement from the January high to the June low. Once the (B) wave completes, we will have a (C) wave down to new lows.
In the Yellow count we are very near to peaking--if we haven't already,--and should turn down soon to new lows. This is short-term bearish, but portends an intermediate-term bullish outcome. If we decisively break 3840, then we are more likely in the Red count, which is short-term bullish and intermediate-term bearish. In either count, it is unlikely that we see new all-time highs for a while.
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