In a New York Tick, Anything Can Change
By Bennett Tindle December 17th, 2019
We’ve had a fairly exciting year in the financial markets, and we are currently consolidating at or near new all time highs in most major US market indices. If you’ve been following our work, you know we’ve been targeting 3200 – 3250 as an upside objective in the S&P 500… and we’re nearly there! The question now becomes, how much higher can we go from here & where are the markets ready to take us? As much as we’d love to know the future, we simply don’t. All we can do its take the information we have at our disposal and use it to the best of our ability. Enter Elliott Wave.
As we move into next year, we see two very different yet technically valid possibilities and outlooks when viewing the markets through the lense of the wave principle… The exciting part is, both scenarios reflect the forces driving the market presently. Will the trade negotiations come to a meaningful and beneficial end, supportive of additional economic expansion and upside in the markets?… or will we end up rolling over following the completion of this impulsive breakout, only to re-visit at or near the December 2018 lows? In our opinion, the upcoming year should present us with exactly the events and catalysts we need to answer this question once and for all. Tune in to hear more and see the breakdown on the charts.
Gold (GLD) has now double bottomed off a key 38% level, completed a reasonable ABC corrective structure for a 4, and has broken upward through the internal pivot high in the corrective structure. Enough to trigger me in long with a sold put spread at/just under market for mid Jan. Nice analysis there.
As for SPX, price isn’t in a primary 1 off a cycle wave 4 low, the cycle wave 4 low was Dec ’18, and price is now in minor 3 of intermediate 3 of primary 3. Primary 1 and 2 are complete. One piece of confirming evidence for this count is the weekly RSI. Of course we expect maximal momentum (RSI slope and levels achieved) during “wave 3”, which is exactly what weekly RSI on SPX shows. In fact momentum is starting to get as high as the second half of 2018, when we eventually moved into a blow off top situation. That’s not likely to happen here, we’ve got some upcoming 4 waves (a minor 4, then an intermediate 4, then a primary 4 over the next 1-2 years). But it speaks to the proper wave count here, where price is showing clear “3 of 3” type of behavior. I know you guys are infatuated with extending the cycle 4 completion point out in time to make it more symmetric with your model of the cycle 2; well, that cycle 2 model isn’t necessarily accurate, either, so you may be compounding inaccuracies with that logic. And the cycle 4 complete placement later (past the Dec’18 low) is just not justified by the price action since Dec ’18, which was and continues very strongly impulsively up. The cycle 4 completed on that perfect touch of the weekly 200 week SMA in Dec ’18. Eventually, you will make that adjustment. But it will take a lot of further structure to expose that inaccuracy, I admit. As for your continuing cycle 4 model that one just needs to be abandoned in the face of this price action. It has zero support technically.
Thanks for being open to constructive criticism. Keep up in the fine work!