Did the S&P just complete a standard 5-wave impulse up off the SPX2558 low, and put in a significant top?!

Bull markets move in often well-defined impulse patterns up that hit specific Fibonacci-extensions. In standard impulse waves (no extensions) 3rd waves often target the 1.382 to 1.618x extension. The 4th wave then drops to the 0.764 to 1.00x extension and then the last wave, the 5th wave of the impulse, targets the 1.764 to 2.00x extension. Off the SPX2558 low we got exactly that. See chart below:

SPX 1min-detail

Yesterday, the S&P tagged the 1.382x extension almost to the T (off by $1.4), then dropped to the 1.00x extension (off by 22c) and rallied today to the 1.764x extension (off by 31c). Remarkably accurate isn’t it; and using these Fib-extensions in trading is highly lucrative. Of course waves can extend, but that hasn’t happened yet. Thus with 5 waves up off the low question now is if the S&P has struck a larger top or not. If that’s the case then we should start to prepare for a 150-250p correction.

But, for that to happen we need to see first a drop below SPX2610 (yesterday’s low) and especially a drop below SPX2578, while not making new All-time highs (ATHs). That will namely mean the market is making lower lows and lower highs; signs of a correction.

A move back over today’s high will mean the market is extending and the next target is then the 2.000x extension at SPX2643.

 

One thought on “Did the S&P just complete a standard 5-wave impulse up off the SPX2558 low, and put in a significant top?!

  1. Pingback: S&P and NASDAQ updates: one final move higher? | INTELLIGENT INVESTING

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