SP500 Elliott Wave: Climbing the 3rd Wave

Executive Summary

• Bullish Trend: SPX is progressing within the 3rd wave of a bullish impulse pattern.
• Key Support: 5,700 level is the invalidation point for the bullish structure.
• Targets: Fibonacci extensions suggest a primary target level near 6,151 (161.8%).

Current Elliott Wave Analysis

The SPX chart follows an Elliott Wave impulse pattern, with the current wave iii of (iii). 

The recent acceleration of the rally is a result of SPX trading in the middle of a third wave. The third wave of an impulse is often the strongest of the five-wave impulse pattern as trader buy into the new trend.

So long as SPX remains above the micro wave 1 high of 5,700, then we’ll consider this bull trend to continue.

Upside targets include 6,151 where wave iii is 1.618 Fibonacci extension of wave i, a common wave relationship.

Additionally, the previous all-time high in SPX is nearby so the market will likely react to stiff resistance near there.

If a pullback appears, we’re viewing it as wave iv that may dip back to 5,850, or about 5%.

Bottom Line

SPX remains in a strong bullish uptrend, with 6,151 as the next likely target. A break below 5,700 would negate this count, shifting the outlook. 

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