SP500 Elliott Wave Analysis: Bearish Reversal

By: Gregor Horvat | Mon, Dec 15, 2014
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S&P500 has turned sharply to the downside last week, more important, price finished the week at the lows which means that a lot of bearish sentiment is now involved on this market. Therefore, we suspect that S&P finished leg from 1812 which was wave V within larger extended wave III. With that in mind, traders should be aware of a big three wave contra-trend move in red wave IV, possibly even back to 1812 at the start of 2015.

S&P500 Daily Elliott Wave Analysis

S&P500 Daily Elliott Wave Analysis Chart

S&P500 finished the week at the lows so looks like bearish sentiment is in play for stocks, which means that traders should be prepared on more potential weakness. In the short-term we expect a drop towards 1960/1970, to complete wave (3) or wave (C). However, price could be in wave (3) if we consider much larger wave structure that calls for a big corrective decline.

On the other-side, we would turn back for 2100 high if 2056 would be taken out.

S&P500 4h Elliott Wave Analysis

S&P500 4-Hour Elliott Wave Analysis Chart

 


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Gregor Horvat

Author: Gregor Horvat

Gregor Horvat
www.ew-forecast.com

Gregor Horvat

Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of www.ew-forecast.com, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on: SafeHaven.com, FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At www.ew-forecast.com he helps clients and educate them about the Elliott wave prinicple and how to label and track unfolding patterns in real time.  His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty however is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators.

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