3:30 p.m. New York time
Half an hour before the closing bell. The S&P 500 climbed midway through the session, around noon, and then fluctuated in a sideways range as the closing bell approached. I’ve updated the chart below.
9:40 a.m. New York time
What’s happening now? The S&P 500 E-mini futures continued to decline overnight and has retraced 38.2% of the previous rise since January 17. That level is a Fibonacci percentage, one of several points where reversals are common. And indeed, as the opening sounded, the price rose a bit. (I’ve superimposed a Fibonacci grid, in red.)
What does it mean? The decline has been large enough to persuade me that the high of 3859.75 on January 21 is indeed the end of the rise and the beginning of a decline, which was my principle analysis in yesterday’s post. The decline could go further, but if I squint my eyes, the correction internally appears to have traced three waves and so has met the minimum requirements for a correction. However, the internal waves seem overly small to me, so my expectation is that there will be more downside.
What does Elliott wave theory say? The decline, beginning on January 21 from 3859.75, is wave 2 of Submicro degree. It will be followed by a wave 3 rise to higher highs, then a shallow correction followed by a 5th wave push up even higher. Submicro 5’s completion will mark the end of wave 5 of Micro degree and Subminuette degree, and wave 3 of Minuette degree.Read More »