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.