The prior blog noted that 03/23/21 was the one solar year anniversary date of the crash bottom made on 03/23/20. It was possible that a new S&P 500 (SPX) high could be made on 03/23/21 plus/minus two trading days.
The daily SPX chart courtesy of Trading View illustrates what happened.
On 03/22/21 the SPX moved up and it appeared to be on the way to a new high within the time target zone. However, today 03/23/21 the SPX went down. There’s still a chance for the SPX to reach a new high within the next two trading days, but the depth of the decline looks suspicious.
A more likely scenario is that Minor wave “4” of a possible Ending Diagonal Triangle could still be under construction. If the price target zone is reached, wave “4” would be about .618 the size of the supposed Minor wave “2” – a common relationship.
Evidence that the SPX could later make another new all-time high comes from the VIX indicator which on 03/22/21 made a new low from its move down from its March 2020 high. Most of the time the SPX makes tops when the VIX records a higher bottom.
Additional evidence US stocks could still rally is illustrated in the daily Consumer Staples – Exchange Traded Fund (XLP) chart.
My 02/26/21 blog “Consumer Staples Fund – Update February 2021” noted the XLP may have topped with a truncated Intermediate wave (5). Additionally, the alternate wave count had the decline from November 2020 as Intermediate wave (4). This alternate count now appears to be the best wave count – the current rally is probably Intermediate wave (5).
The price target zone is where wave (5) would be about 50% of Intermediate wave (1) – a common relationship. The price target could be reached in two to five trading days.
If the SPX supposed Minor wave “4” is still underway, a new all-time high could come in three to six trading days.
