S&P 500 Could be in Short – Term Decline

On 11/09/20 the S&P 500 (SPX) may have completed an Elliott five wave extended impulse pattern from the bottom made on 10/30/20.

The hourly SPX chart courtesy of Trading View illustrates the action from the 10/30/20 bottom.

The tricky part of the wave count is the supposed Minuette wave (v).  This could be a Truncated fifth wave in which wave “five” fails to exceed the termination point of wave “three”.  Note the subdivisions of wave (v) which began after Minuette wave (iv).  The gap up opening high on 11/09/20 could be wave “iii” of the supposed wave (v).  The subsequent small decline could be wave “iv” then the final rally which topped below wave “iii” could be wave “v” of (v) of “v – boxed”.

The problem with Truncated fifth waves is that they increase the possibilities for alternate wave counts. Truncated fifth waves can not be forecasted. They usually require considerable subsequent wave action for confirmation.

If a near – term decline has begun watch the Fibonacci support levels for a potential bottom. Also watch the hourly Stochastic and RSI both of which still have not reached their respective oversold zones.   

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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