S&P 500 riding bottom of up channel and under resistance lineAfter that massive rally yesterday the S&P is look weak this morning. No major gap up like every other morning for the last week. You can see that it is now riding on the lower edge of the up channel and it is now back under the core resistance line that limited that last big rally. The bullish view would be it is time to cool off and consolidate before another big push. In my bearish point of view, this rally may have finally run out of steam as the S&P is just way too overextended at these levels.
IVV
Why did the S&P peak there today?Note the blue trend line based on run up to 2018 and Feb top. Also, note the perfect hit on the pitchfork 1.236 level outside the linear regression channel. This market is bound by those lines and short of retesting them, I don't think it is going to break and hold them.
S&P 500 - Repeat of Aug 27 - Sept 2 FOMO rally???Will we see a repeat of the Aug 27 - Sept 2 rally? It has broken through all of the other resistance levels and trend lines . There are three left: 1) the bright green resistance trend line connecting the Feb and Sept highs, 2) the major fib level from the dot com bubble, and the 1.236 fib extension off the March low. All right around the same area. Watch these closely the next few days.
Are we going to see another morning gap up? That has been the only way this rally has made any real progress, but I see a descending triangle pattern, which is bearish. Is it going to try and close that gap first?
S&P 500 - Bears hold or fold at 3676???3676 is the key level to watch to day. In a corrective wave 1.236 is the max amount a corrective wave B can retrace. If the bears can hold, then this is a corrective wave and more down to come. However, if the bears fold then get ready for a dot com level bubble.
S&P 500 - Not until it breaks and holds this blue trend lineThe current rally is not a continuation of the March rally unless it can break and hold for more than a day the blue trend line. However, it has failed to do that 2x before. Both times ended in a strong correction. If it fails a 3rd time, then this would be a clear triple top pattern and I would expect a larger correction than before.
S&P 500 - Will it peak 3550 around 1:30 and reverse?Just a thought based on past patterns. Maybe this is the end of the road or we could push a bit higher to meet the 3550 S/R line. FYI, there are several gap ups that need to be filled with a correction.
S&P 500 rallies to fill final gap right to edge of down channelWill it turn back or push up to the next resistance line from the ATH and the recent top?
S&P 500 approaching end of rising wedge and edge of channelDon't be fooled by that break out last week. S&P 500 is still in its rising wedge to complete the counter wave B to the September drop wave A. I marked on the chart where FOMO/MOMO pushed it up through the upper trading channel that was set by the 2020 February peak and all the way to the trend line formed by the 2009 low and the 2018 and March 2020 peaks. However, the market bounced hard off those resistance lines and fell back into the rising wedge pattern. We seem to be in a small corrective wave (double top of sorts) off the the recent top. IMO we look like we may start the final leg of the correction. See my chart on Regular Flat Corrective Wave for more details on my hypothesis.
Hope this helps and good luck.
Large View
S&P 500 - Regular flat corrective wave --> in Wave C?I have been watching this setup for a while. This is looking a lot like a text book regular flat corrective wave, of which we are in wave c. Note that the S&P hit the 0.9 fib level off the recent low exactly.
Elliott Wave Theory : Rules, Guidelines and Basic Structures --> elliottwave-forecast.com
Flat: A flat correction is a 3 waves corrective move labelled as ABC. Although the labelling is the same, flat differs from zigzag in the subdivision of the wave A. Whereas Zigzag is a 5-3-5 structure, Flat is a 3-3-5 structure. There are three different types of Flats: Regular, Irregular / Expanded, and Running Flats.
Guidelines for a regular flat
• A corrective 3 waves move labelled as ABC
• Subdivision of wave A and B is in 3 waves
• Subdivision of wave C is in 5 waves impulse / diagonal
• Subdivision of wave A and B can be in any corrective 3 waves structure including zigzag, flat, double three, triple three
• Wave B terminates near the start of wave A
• Wave C generally terminates slightly beyond the end of wave A
• Wave C needs to have momentum divergence
Fibonacci Ratio Relationship
• Wave B = 90% of wave A
• Wave C = 61.8%, 100%, or 123.6% of wave AB
S&P 500 - Some useful trading channelsI marked up some key trading channels for the S&P.
March rally
2009 rally
Note that on a multi year time frame linear regressions take teh form of a triangle.
You can only see the 2009 rally linear regression in 1D time frame
S&P 500 (ES1) trend lines, channels, and fib levelsHere is what I got for the S&P 500 (e-mini) this morning.
S&P 500 - Above its rising wedge and outside its trading channelNote that the S&P is well above its rising wedge pattern and outside of the down channel. I am terrible at guessing what the market will do, but this really looks like the June FOMO and August FOMO events. We all know what happened next.
S&P 500 trend lines, trading channels, wedges, and some guessesA lot of TA in this chart, so bear with me. S&P clearly in a rising wedge. Latest rally came up short of resistance line (red box), which is a sign of weakness. RSI touching overbought in 2H. In the MACD it looks like the last rally was above the trend lines (maybe a bit of retail FOMO). There are several options for the S&P over the next week or so. IMO, seems too early to start Wave C of the correction. This bull market has been hard to stop. I have a feeling we will have a moderate pullback and then one more try to touch the orange trend line. The thickness of the arrows is my estimate of the likelihood that the trend occurs.
S&P 500 (e-mini) Wave count and possible Wave B conclusionHere is a mark up on the e-mini futures for the S&P 500. I made some educated guesses at possible conclusions for the current Wave B.
S&P 500 (ES1) log view with waves - Expanded Flat Correction?Another experimental idea of mine built on my linear regression idea from last week.
S&P 500 stuck at the resistance of 2018 trading channelNote the trading channel since 2018. There are many touch points over the last 2 years.
S&P 500 (ES1) - Linear regression in log shows rising wedge?I am not sure what this mean mathematically, but the pattern it makes is not good for the S&P.
Linear view
S&P 500 waves and trend lines - Still in down channelHere is what I got for the S&P 500 over the last few weeks and what I think the next week or two may look like.
I still think there is one more leg down before a small rally. The S&P is still clearly in the down channel and I see a falling wedge pattern. The VIX barely sank at all on Friday given the rally. I would have expected that to drop a lot more if the S&P is ready to pop. You can also see on the RSI that S&P is hitting the resistance line set over the last few weeks. All signs that I am reading as still bearish. Market likes to zig when I think it is about to zag, so it will be interesting to see.
S&P 500 showing its hand? Falling wedge & down channel to 3170Did the S&P just show its hand? Looks like a falling wedge with its tip right in the middle of the down channel I have been tracking.
S&P 500 - Test below June 8th supportSeeing a test below the June 8th peak. No serious spring back up yet. Not an encouraging sign. I am still very bearish . I am guessing that we may see a weak rally and one more good drop before we find significant support.
S&P 500 - Waves, Trend Lines, and ChannelsAn overview of all the important waves, trend lines, and channels since Feb. Note that my waves may not match most other peoples. Everyone else is trying to make this years rally as a new motive wave and I have it marked up as a corrective wave B. The numbers make more sense to me that way. I don't really know where it is going in the next few days. It feels like we should see an impulse back up after all of this selling. It really feels like there is a lot more drop to come. My confusion is that the NASDAQ looks to be in a bullish pattern looking for a push for a double top. As we all know what the NASDAQ does greatly influences what the S&P does.
S&P 500 - Made it back to June 9th peakWhat goes up must come down, right? That was a pretty quick retrace right back to the June 9th peak driven by the job's report FOMO. In just about 3 weeks the S&P negated 2 months of rally. IMO, still has more to go. Right now it looks like it might hang around this resistance level. I still feel like there is a bounce here, but it could just be a pause before another move down. I like the bounce so it can pump the RIS up so we can have a nice long downdraft to the 3050 range. As you can see, there is plenty of room in the down channel for this type of move.
The NASDAQ is down but not as much as the S&P. Once the NASDAQ makes a similar down move, the S&P will drop like a rock IMO.
