S&P500 remains on track for 2500-2475 target zone.

For weeks the S&P500 has been holding on to the SPX2600 zone, but late last week it failed to close above it by 5c and today’s price action is therefore no surprise. It is now on track to reach my preferred target zone of SPX2500-2475, which I’ve had for the last few weeks: see for example my daily market update archive here, as well as my November 10 update here. Originally I was looking for SPX2540-2440, but as the markets provided more price action I was able to specify it to SPX2500-2475. Why this range? Because this is where:

  • (red) intermediate-c equals intermediate-a, measured from  intermediate-b
  • (green) minor-c (sub-wave of intermediate-a) equals 1.618x minor-a, measured from minor-b. 
  • (grey) minute-c (sub-wave of minor-c) equals minute-a, measured from minute-b(green) minor-c (sub-wave of intermediate-a) equals 1.618x minor-a, measured from minor-b.
Fig 1. Most upside targets reached as forecasted, now on track to reach downside target

The blue line shows the anticipated bounce from that low, but there’s currently no data yet to suggest it’s will come true so take it as an FY, store it for now, and leave it on the back burner for when the moment comes. In addition, the SPX2500 target also fits well with a simple “box symmetry” target. 

Fig 2. Simple symmetry and “what goes in, must come out” suggests SPX2500

Hence, when three different wave-degrees with standard Fib-extensions as well as simple symmetry all point to the same region, this strong confluence of results means it will most likely be reached. When it will be reached -and the markets are already getting very close!- we will then have to see a strong reaction of that zone to tell us a larger bounce (200-300p on the S&P500) is underway. Why only a bounce? Because the pending low will IMHO only be the first wave down of a much larger correction that ideally targets around SPX2100+/-100 when all is said and done. Once that price level is reached the markets can then decide to put in an even larger bounce and then relapse again to new lows, or to rally to new ATHs. I am not so sure about the latter case yet given the weakening long-term charts, international indices, etc. But, let’s not worry too much about what may, and first focus on what is. 

My premium members have enjoyed my accurate price target forecasts throughout this correction as I’ve gotten 5 out of 6 correct and missed the 6th by only 10p on the S&P500 (pardon my inaccuracy 😉 ). Some of my members have actually already exited the market way before -in September- and are very grateful for my insights as my tweet from last week shows (see here), because I was already sounding the warning bells for them in June, as my recent tweet shows that when ~SPX3000 would be reached things would get ugly. See: here. If you enjoy and are in need of accurate short- to long-term price forecasts for the markets, and who isn’t- joining my services can be of great help to you and your portfolio. I’ll let my work speak for itself and you can then decide for yourself. Trade safe! 

Arnout, Ph.D.

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Founder and President Intelligent Investing, LLC
Vice President NorthPost Partners, LP

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