Stock Topping Process Continues

My prior blog “Potential Lunar Cycle Turn” noted  that the US stock market could top within plus or minus two trading days of  the new moon made on Saturday 03/13/21. Today the S&P 500 (SPX) made a new all-time high unconfirmed by the other two main US stock indices (Dow Jones Industrial Average (DJI) and the Nasdaq Composite). A  major top in place? Possible, but the intraday DJI chart courtesy of Trading View implies at more upside.

My blog “Nasdaq – 100 Breaks Through Resistance Then  Declines” noted that the DJI fifth wave on the intraday chart could be  extending.  A  fifth wave extension happens when what appears to be a fifth wave is actually just the first wave of a new five wave pattern. The move up made on 03/09/21 was the beginning of an extension – note the Minute  wave “i” label.  Then on 03/12/21 a second extension happened –  note the Minuette wave (i) label.

What’s even more interesting, the second extension appears to be a developing Elliott wave – Ending Diagonal Triangle (EDT).  An  EDT is the termination move of a larger pattern, in this case it’s the rally that began on 03/04/21.  After  the EDT completes the subsequent decline usually retraces to at least the EDT point of origin – the bottom made on 03/04/21.

The five – minute DJI chart illustrates the nature of the 03/16/21 decline.

Choppy declines are the signature of corrections when the primary trend is up.  Also note the difficulty making new lows, this implies the DJI could make at least a marginal new high on 03/17/21. 

The FOMC announcement is at 2:00 PM – ET on  03/17/21 and could trigger a movement in stock indices.  If any of the three main US stock indices, make a new high on 03/17/21 it probably means the potential lunar cycle turn is invalid. If the rally in US stocks continues there could be an important peak on or near 03/23/21 – the one solar year anniversary of the post-crash bull move. 

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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