S&P500: Not Over Yet

Technicals | Dec 01 2021

Bottom Line 30/11/21

30/11:
Daily Trend: Down
Weekly Trend: Up
Monthly Trend: Up
Support Levels: 4279 / 4000
Resistance Levels: N/A (all-time highs)

Technical Discussion

Reasons to remain longer-term bullish:
→ Elliott Wave count continues to have bullish momentum bigger picture
→ major support/resistance zone around 3550 – 3450 continues to hold strong
→ higher degree Wave-[4] confirmed a major low back in March 2020
→ Wave-3 or (3) move north now in progress and continuing to subdivide

Well, tonight we are doing something a little different by reviewing three of the U.S Indice bellwethers at the same time and therefore doing two S&P-500 reviews this week. We thought this would be an interesting exercise, especially as each is running within their uptrends under varying wave counts. Be it we remain longer-term bullish on all of them. The recent Omicron scare has also provided the catalyst we were looking for, especially on the S&P-5000 and Nasdaq, to provide some needed depth within the immediate wave counts we’ve been running with. Whether the new variant becomes a permanent feature of some upcoming volatility remains to be seen, although on the flip to MSM scare tactics, many experts are now saying it is time to start living with Covid and accept that variants are going to be ongoing and part of the process moving forward. This week we will know whether the market is going to agree or not!!??

So as part of last Friday’s dip, the Type-A bearish divergence we highlighted last week that we felt still needed to unwind more fully, has now done so over the last couple of sessions. It’s not back to fully oversold yet close enough may well prove to be good enough here. Especially if a swift turnaround is witnessed from here and the bulls regain control.

Our Elliott Wave count as you know remains strongly bullish longer-term, with the wave structures across all time frames providing the price symmetry we like to see in bullish markets. As such our ongoing wave count continues to look solid. And for the S&P-500 that means the minor degree wave-iv of (v) of 3 has now potentially completed, which means a wave-v of (v) of 3 may now be in motion to the upside. With our 1.618 x W1 extension target circa 4753 remaining firmly in our sights, or potentially even beyond. We would be more than comfortable with a little more depth to the immediate minor degree wave-iv as well. Especially as it would likely fully unwind our divergence indicator back to oversold. There have been so many pundits out there calling for markets to crash for some time now. And they were out again last Friday with the market blip that was witnessed. They will be right one day yet the best advice we can give is to simply follow price action. And for now, it continues to remain robust overall.

Trading Strategy

Without overexposing on the U.S side of things we will continue to stand aside from trading the S&P-500 and especially based on how deeply evolved we feel the Wave-3 is now. Last Friday’s scare may not be completed just yet either, so more than happy just to see how the dust settles over the coming sessions.

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