Hello traders,
A lot of people have been messaging me asking if I can do an EW extrapolation on the current SPX environment, so I have gone ahead and done so.
A few important general points:
1) This EW analysis I have depicted as charted is based on the mid-term. That is, it has nothing to do with might happen in 12 months, or even 6 months from now, so please don't ask me if this will be "the ultimate bottom" or if this will go up in a straight line afterwards. These are not reasonable questions at this time.
2) The stock market is not rational. Retail investors (day-traders) need to realize that the market does not equalize morality in what occurs in the real-world to what "should" happen in the market.
A few important points regarding technical analysis:
1) An OPEC deal or lack-there-of will likely be the focus on what Monday might bring. It appears Mexico might be holding back on a deal (for now?) but news can change at any time. Even if we see a red day on Monday, I suspect the trend will not be broken and the C wave will still continue higher.
2) Where the C wave completes will depend on where the next bottom could be. Until I receive confirmation on where the C wave will 'top out' I will stick with my initial call of the mid 1800s. Once we receive confirmation of the completion of this C wave, we can deduce at what level the next bottom will fall into.
3) The bottom which I believe will come sometime in the summer may not be "the ultimate bottom". It is still possible in the longer-term we could then form a corrective wave up yet again, only to make newer and low lows months or a year or two later. However, this is purely speculative right now but all in the realms of a long-term possibility. This will be up for analysis and discussion towards the Fall of 2020.
FAQ
Q. Elliot Wave theory can always have invalidation levels, so at what level would we have to see before we say it could be a V-bottom and we won't test the lows at all?
A. While I see a V-bottom probability as extremely low, the impulse wave down would become less and less valid if the market progressively closes above 3030ish over several days. That is still a long ways away and the chance is again, extremely low.
Have a safe and healthy long-weekend and will see everyone back on Sunday!
- zSplit
A lot of people have been messaging me asking if I can do an EW extrapolation on the current SPX environment, so I have gone ahead and done so.
A few important general points:
1) This EW analysis I have depicted as charted is based on the mid-term. That is, it has nothing to do with might happen in 12 months, or even 6 months from now, so please don't ask me if this will be "the ultimate bottom" or if this will go up in a straight line afterwards. These are not reasonable questions at this time.
2) The stock market is not rational. Retail investors (day-traders) need to realize that the market does not equalize morality in what occurs in the real-world to what "should" happen in the market.
A few important points regarding technical analysis:
1) An OPEC deal or lack-there-of will likely be the focus on what Monday might bring. It appears Mexico might be holding back on a deal (for now?) but news can change at any time. Even if we see a red day on Monday, I suspect the trend will not be broken and the C wave will still continue higher.
2) Where the C wave completes will depend on where the next bottom could be. Until I receive confirmation on where the C wave will 'top out' I will stick with my initial call of the mid 1800s. Once we receive confirmation of the completion of this C wave, we can deduce at what level the next bottom will fall into.
3) The bottom which I believe will come sometime in the summer may not be "the ultimate bottom". It is still possible in the longer-term we could then form a corrective wave up yet again, only to make newer and low lows months or a year or two later. However, this is purely speculative right now but all in the realms of a long-term possibility. This will be up for analysis and discussion towards the Fall of 2020.
FAQ
Q. Elliot Wave theory can always have invalidation levels, so at what level would we have to see before we say it could be a V-bottom and we won't test the lows at all?
A. While I see a V-bottom probability as extremely low, the impulse wave down would become less and less valid if the market progressively closes above 3030ish over several days. That is still a long ways away and the chance is again, extremely low.
Have a safe and healthy long-weekend and will see everyone back on Sunday!
- zSplit