Looking For Next Market Top AgainLooking for next top
Submillennium 1
Grand Supercycle 5 - green
Supercycle 1
Cycle 5 - orange
Primary 5 - blue
Intermediate 5 - pink
Minor 5 - yellow
Minute 5 - green
I will try to find the next top off simply modified wave theory.
First we need to set the baseline. I prefer the chart SPX500USD as it encompasses 23 hour trading during the week and can capture movement not always distinguishable in the SP:SPX chart.
My first step is always to identify the location of wave 3 (if it exists). I do this by using my Elliott Wave 3 Finder v2 in conjunction with my RSI triple confirm indicator and a simple RSI 9.
My wave 3 indicator will have a painted background at potential wave 3 locations, blue background for bearish reversals and pink for bullish reversals. My triple confirm RSI should signal in conjunction with the actual wave 3 point, red for bearish reversals and green for bullish reversals. My wave 3 indicator tends to spot wave 3 of 3 by displaying a gap between painted backgrounds. These indicators signal upon market close and are not considered finalized signals until the next bar begins.
My baseline is in the 2 month chart. I have worked through the historical SPX chart and believe we are in the fifth and final wave (Grand Supercycle 5) of a larger structure (Sub Millennium 1) that began in the 1800s. This specific wave 5 began at the market bottom in 2009, and we are only in the first (Supercycle 1) of five waves to the upside. I do not expect a catastrophic market top for many decades to come.
This chart picks up around 2004 to the current time. We are likely in Cycle wave 5 which began at the market low in October 2022. I have determined Cycle wave 3 to have ended at the peak at the beginning of 2022 based on the wave 3 indicator and RSI agreeing on a reversal point. In the moment, I would not have agreed the market topped in January 2022 as the indicators were still signaling. It is only on the preceding bar not producing a signal that an event is confirmed. Next I will determine common wave extensions off (Fibonacci levels) of Cycle wave 3's movement which began at the low in January 2016 at 1,806.25 and ended at 4,820.20 in January 2022. Wave 3 moved 3,013.95 points. Cycle wave 5 could move 123.6% to 138.2% of Wave 3's movement. These means a potential endpoint is between 5,531.49-5,971.53. This will be the orange outlined box in the following charts and the main chart above.
Next I will try to identify a current Primary wave 3 inside of Cycle wave 5. My indicators point to Primary wave 3 ending around the mid-July 2024 on the 2-day chart based on the gap in the wave 3 indicators. There is not an RSI 3 signal in the 2-day chart for Primary wave 3, but there was one for Minor wave 3 in Intermediate wave 3 in Primary wave 3 around February 12, 2024. We can attempt to confirm this by seeing where the end of Intermediate wave 5's movement extended too. If Intermediate wave 3 began January 5, 2024 and ended March 29, 2024, Intermediate wave 5 topped close to 161.8% of Intermediate wave 3's movement as seen below:
Based on this assumption, Primary wave 3 was likely over by mid-July 2024. The next Fibonacci wave extension levels for Cycle wave 5 could see this wave end between 108-123.6% of Primary wave 3's movement. This places a potential top between 5,806.48-6,052.34. This will be the light blue outlined box in the following charts and the main chart above.
We will next move inside of Primary wave 5 which possibly began at the low from the beginning of August 2024. In looking for Intermediate wave 3 inside of Primary wave 5, the indicators point to Minor wave 3 of Intermediate wave 3 occurring on September 19, 2024 and the Minute wave 3 inside of Minor wave 3 occurring on September 13. If we find the Intermediate wave 5 extension from this Intermediate wave 3, a potential top sits between 5,816.26-5,936.51. This will be the pink outlined box in the following charts and the main chart above.
Next we try to identify where we are in Intermediate wave 5. The 2-hour chart here indicates a possible Minor wave 3 occurring on October 9, 2024. A possible Minor wave 5 extension from here is a top between 5,825.38-5,868.50. This will be the yellow outlined box in the following charts and the main chart above.
We can attempt to go a final level deeper inside of Minor wave 5. We currently have Minute wave 3 indications based on the high from earlier today at 5826.90. If this is the end of Minute wave 3, Minute 5 could top between 5,834.16-5,857.61. This will be the yellow outlined box in the following charts and the main chart above. Based on a this wave set being over a small timeframe, this top could happen before next Tuesday. This is zone of interest for a near-term top.
This is purely theoretical, but Israel will likely strike at Iran soon. Iran has claimed they would respond quickly, but the prior instances saw long delays in the response. If Iran has an immediate response, a full on conflict would be underway in the Middle East. Not all wars are bad, but this one would likely impact oil and depending on the duration likely impact economies around the world. A contained conflict between a few nations likely would not spiral into a larger conflict, however, strong alliances on other side could turn this into a much greater event, closer to a world war situation. As drastic as this is, it could explain a potential near-term top. If conflict does not break out, we will likely see a short-term market top before continued movement higher and higher. Time will tell. Enjoy!
