Update

At the low in August I wrote that there is nothing so bearish because the move lower is only three waves and there is two options B wave or the last wave up to finish wave 3 on the daily chart. Until my last post two weeks ago wave B was more likely, but after initial reaction from the resistance zone we did not saw follow trough. Now it is obvious that this move is part of wave three.


I think NYSE has the most clean pattern showing five waves for wave 3 and five waves for wave v of 3.

Short term - for example NASDAQ has five waves higher, but NYSE and SPX have overlapping waves and the only way I see for a finished pattern(impulse) is two more highs. As long as the support zone holds I expect to see this two highs. On the chart is shown the NYSE index, but SP500 has the same pattern with support zone 2480-2490.

Update

This weeks and the next two weeks there will be no weekly analysis. If I have time I will post short updates.


SP500 is testing the resistance zone and the trend line as expected. Most of the indexes look more like a-b-c only Nasdaq more like 1-2-3 because the second wave higher is longer, but it could be just C=1,618xA. I think it is wave B, but we need confirmation first
This is a moment when you can not say if the price will break above resistance or reverse lower.... you can try to forecast, but you do not have a guarantee for an outcome with high probability.
With this said I think patience is better than trying to bet on bearish outcome at the moment and the time to be bullish was as I wrote about the short term bottom:). I do not see signs for imminent reversal so it is more likely to see toping for 1-2 days or continuation higher:
- if this is wave B(red) toping should start - boring Friday and most likely a top on Tuesday.
- if this is wave 3(green) in the next two trading days the price should continue moving higher above resistance and challenge the ATH. If SPX can not rally 20 points(wave 3=1,618x1=2490 the previous high) in the next two days this will be a warning sign for the bulls.