Long Term Update

Primary wave 3 of cycle wave 1 in progress
Recent February low may have been price low of wave 2 of primary wave 3

Wave Counts Indicate Top Possible by Spring/2013 for S&P500

Below is a monthly chart of the S&P500 showing the updated wave counts. We are currently in primary wave C of cycle wave X from the March/2009 low. Primary wave C began at the October/2011 low and is forming an ending diagonal. Major wave 4 of primary wave C ended at the recent low on November 15th. Major wave 5 of primary wave C is now in progress and should top in the 1st half of 2013 (most likely by the spring, especially February to April). The ending price of major wave 5 should be near the upper teal trendline and above the September/2012 top.

                                 Monthly chart of S&P500, click to enlarge

Two bullish possibilities for the US stock market, Updated 6/24/22 & 6/25/22

The correction since January has brought forth a new wave count possibility for the SPX index. The original cycle wave 4 count is still valid. The extent of the correction has introduced the possibility that a larger degree wave 4 has formed instead (see note on side panel). 

Based on other indicators I study as well as EW, if the original cycle wave 4 count is still in force, then cycle wave 5 may be sharper in nature and could top within the next several months or by eoy 2022. Otherwise, if the supercycle degree wave 4 is in force, wave 5 may be more gradual and may not top until 2023-2024. With that count it would also be possible that supercycle wave 4 is not over as wave 4's tend to be sideways in nature. With that then the most recent May 20th low could be wave A of supercycle wave 4 followed be multiple waves which form that sideways count over a similar or shorter time scale. 

In any of the above scenarios, I believe the low of either wave 4 possibility has been made. Any drop below that low should be mild or brief. 

Update 6/24/22: 

The cycle degree wave 4 count as given previously is not looking like a likely resolution which now makes the supercycle degree wave 4 the best count. While the S&P500 cycle wave 4 has not overlapped with cycle wave 2, that did occur late last week on the CRSP US Total Market Index which is a main reason for the above change. 

This does not change the supercycle degree wave 4 comments as given in the original 6/8/22 post shown above.

A lessor possibility is that the move up from the 2020 low to the 2022 high is a supercycle degree wave 5 (instead of sd wave 3). If so, It could be cd wave 1 of sd wave 5 and it may form an ending diagonal pattern with overlapping waves that count better as 3's rather than 5's. That type of formation would also be possible if sd wave 4 ended at the recent low.

Update 6/25/22:

As mentioned above, sd wave 5 could form an ending diagonal EW pattern. With that the initial cd wave 1 is the strongest and fastest wave if it is contracting - contracting is more common than expanding. This is shown in the 2nd chart below.

Monthly S&P 500 futures chart showing cycle degree wave count (purple labeling) and supercycle degree count (orange labeling). Click to enlarge.

Update 6/25/22: Bi-monthly S&P 500 futures chart showing supercycle degree wave 5 as a contracting diagonal (blue labeling).

S&P500 Update

This is a six month chart of the SP-500. I'm counting the move down from April 2 as a flat(major wave X of primary wave C). This is a potentially good buy point for a 50% or even 100% retracement up(see chart), but as previously stated, we are not out of the woods until late June or mid July when there are negative cycles peaking(that period could now end up being high instead of a low).

S&P500 Wave Count Update

Two week chart of S&P500, click to enlarge

Above is a two year chart of the S&P500 showing the current wave counts.

The previous blog update on September 14th labeled the move down from the May top as major wave Y of primary wave B(nearing completion) with a 1st price target for primary wave C near the July highs.

Major wave Y bottomed about 3 weeks later on October 4th with just a one day close below the August low. The subsequent primary wave C 1st wave then blasted up toward that 1st price target but did not quite reach it.

As mentioned previously in the blog and Twitter updates, Primary wave C should be either an impulse or ending diagonal in order to complete a zigzag from the March/2009 lows. As shown in the chart, major wave 1 of primary wave C ended at the October 27th high, major wave 2 ended at the November low and major wave 3 is now in progress. The waves thus far have been mostly three wave structures which indicates primary wave C is forming an ending diagonal, not an impulse.

An alternate count shown has major wave Y of primary wave B ending at the November low. That count would have the same outlook as the preferred count from the bottom of major wave Y. Another possibility is that a triangle ended at the December low, and that would also have the same outlook.

The price resistance shown and also mentioned in the tweets is at 1298 to 1310 and around the May high. Perhaps major wave 3 will top in that 1st price zone and major wave 5 in the 2nd price zone. I am looking for that wave 5 top to occur by late March at the latest and mid January at the earliest.

S&P 500 Updated Wave Counts

Three year chart of S&P 500 etf  SPY, click to enlarge

Above is a three year chart of the S&P 500 etf SPY showing updated wave counts. The move up from the July/2010 low to the May/2011 high (major wave X of primary wave B) does not count well as an impulse. Since the wave up from the March/09 low to the April/2010 high (primary wave A) is best counted as an impulse, primary wave C should be an impulse or diagonal in order to complete a zigzag from the March/09 low. Major wave X of primary wave B does not meet that requirement, so it must be part of a primary wave B.

Primary wave B may now be forming wave D of a triangle from the Summer highs to be followed by wave E which may complete by the last week of this month. The completed triangle would be major wave Y of primary wave B. Once primary wave B is complete, primary wave C would end somewhere above the May/2011 high and possibly above the 2007 high. A close below the August 9th low may invalidate this outlook.