On 05/07/21 the S&P 500 (SPX) reached its all-time 4238.04. Today 06/09/21 the SPX high was 4237.09 a 99.4% retracement of the post 05/07/21 decline.
Additionally, the SPX may have completed an Elliott wave – Ending Diagonal Triangle (EDT) from the bottom made on 05/12/21.
The hourly SPX chart courtesy of Trading View illustrates the action since the all-time high.
The supposed Minuette wave (ii) is much shallower than the typical wave “two” of an EDT, other than that the pattern has the required characteristic for an EDT. For the sake of clarity, I’ve only illustrated the “a, b, c, “ subdivision for Minuette wave (i). In an EDT all five sub waves divide into three wave patterns or a combination of three wave patterns.
There’s a Fibonacci relationship supporting the wave count. The supposed Minuette wave (i) was 177.24 points multiplied by .382 equals 67.70 added to the Minuette wave (ii) bottom 4167.93 targets 4235.63. The wave (v) high was 4237.09.
The hourly RSI shows multiple bearish divergences implies at least near-term downside action.
An alternate count has a Triple Zigzag completed at todays high. This pattern and the EDT both have the same near-term bearish messages. If there’s a subsequent multi-week or multi-month decline the ambiguity of these two counts could make future wave counts more difficult. If this develops it will be discussed in future blogs.
The SPX May and June double top, as well as the smaller triple top from 06/01/21 implies powerful resistance at SPX 4238.04, it could take a powerful move to break that barrier.
The May – US Consumer Price Index is released 8:30 AM – ET 06/10/21. This report could be the catalyst for a big price movement. The SPX wave pattern, Fibonacci coordinates, and momentum indicators hint at coming downside action.