Monday, 25 August 2014

S&P500 diving soon?

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Hi Traders,

The S&P500 appears to be really close to the end of the line and it might stage the very last rally to the area 2007-2073 before reversing a 5 years uptrend.

Please note that, at this stage, if anyone screams "abandon ship!" some high frequency trading systems might trigger a havoc.

Hence, the level of risk is very high and might be wise staying at the window till a genuine reversal takes place.


The weekly chart displays the end of major wave 3. Note that some Elliott traders think that we it's the end of major wave 5.

Whatever it is, it doesn't make much difference. We still expect a reversal pattern.

Note in the monthly chart that unusual a-b-c in red. I labelled it that way for 2 reasons:

  • in the Russel 2000 Index that pattern is a real a-b-c "Flat"
  • each leg is made of 3 or 7 waves (no 5 leg waves), a clear indication of a "Flat" retracement pattern.

BTW, the 4-hour chart and the 1-hour chart display an extension in wave 5 and an exhaustion gap. All signs of impending end of the 5 years uptrend.

Finally, note the 45 degrees Gann line in the monthly chart


Both the Gann line in the monthly chart and the 36 weeks vertical line in the weekly chart indicate the mid of November for the end of the uptrend.

Consequently, they might be a "Truncation", ie. an irregular a-b-c Flat where "b" is higher than the orthodox top.  We'll see. 


first up to 2007-2039 or even 2073 
then down to
likely: 1892-1888

Monthly chart - click to enlarge

Weekly chart - click to enlarge

Daily chart - click to enlarge

4-hour chart - click to enlarge

1-hour chart - click to enlarge

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