• 4 hours Dow Scrambles To Avoid Fifth Straight Weekly Loss
  • 22 hours Is This The World’s First Truly Democratic Stock Exchange?
  • 1 day India’s Wealthiest Set To Hold $23 Trillion By 2028
  • 1 day First Quarter Profits Slip For World's Top Oil Companies
  • 1 day The Yuan May Be China's Biggest Weakness
  • 2 days Hedge Funds Having A Banner Year
  • 2 days Disney Heiress Asks “Is There Such A Thing As Too Much?”
  • 2 days BHP Turns Bullish On EVs
  • 2 days Investors Turn Bullish On America’s Nuclear Decommissioning Business
  • 3 days The $90M Inflatable Rabbit Redefining Modern Art
  • 3 days Huawei’s Fate In The Air
  • 3 days Tesla Slashes Prices Again
  • 3 days The Modern History Of Financial Entropy
  • 4 days Italy’s Central Bank Embraces Sustainable Investing
  • 4 days Trump Lifts Metals Tariffs To Cool Simmering Trade War
  • 4 days Researchers Push To Limit Space Mining
  • 4 days Could China Start Dumping U.S. Treasury Bonds?
  • 5 days Is Winter Coming For HBO?
  • 5 days Rise Of EVs Signals Peak Gasoline
  • 6 days Jeff Bezos Doubles Down On Space Colonization Ambitions
Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

TheWaveTrading

TheWaveTrading

TheWaveTrading

My goal is to establish the most likely path that the price of a particular asset will undertake and profit through ETF instruments both on…

Contact Author

  1. Home
  2. Markets
  3. Other

SP500: The Magnitude of a Trend Line

The lower high established at the November peak can be the first step of a trend reversal.

A new bearish cycle will be confirmed if price breaches the August low establishing a lower high.

If this is the case the risk of a retracement towards the range 1574 - 1553 would substantially increase.

In the mean time as long as SP 500 does not reclaim the 10 mma which today stands at 2041 the trend is pointing down.

S&P500 Monthly Chart
Larger Image

A trend line that connects the October 2014 and the August 2015 lows is probably the line in the sand. If the trend line is breached we could make the case that it is the neckline of a Head and Shoulder. The measured target is located at 1611.

S&P500 Monthly Chart 2
Larger Image

In the weekly time frame the Head and Shoulder can be seen clearly.

S&P500 Weekly Chart
Larger Image

If the neckline holds SP 500 could be carving out a Bullish or Bearish Triangle:

  • Bearish Triangle:

S&P500 Bearish Triangle
Larger Image

  • Bullish Triangle:

S&P500 Bullish Triangle
Larger Image

Elliott Wave wise the Triangles scenarios can only pan out if the decline from the November peak unfolds a 3-wave down leg.

So far, in my opinion, from the November "lower" high we can count a 3-wave down leg in progress. The wave 3 is probably not done yet

Once the wave 3 is in place if bulls are not able to reclaim the "overlap" line at 2005 odds should favor an impulsive decline which will most likely breach the neckline of the H&S opening the door to a large retracement.

S&P500 Daily Chart
Larger Image

 

Back to homepage

Leave a comment

Leave a comment