Possible US Stock Market Top – December 2021

The 08/22/20 blog “Forecast – Bull Market Termination Date – 2021” illustrated a fascinating web of Fibonacci time relationships connecting major Dow Jones Industrial Average tops/bottoms going back eighty-nine years.  These time relationships pointed to a potential turn in 2021. This type of time forecasts does not predict a top or a bottom, only a potential turn, price action going into the time target indicates a top or a bottom.  US stocks were rising into 2021 and implied a possible top.   This forecast used yearly time coordinates and could only forecast a turn sometime within 2021 – a wide range.  It requires analysis of the next lower time scale, in this case monthly to find a narrower range.

The monthly S&P 500 (SPX) courtesy of Trading View illustrates a monthly Fibonacci time forecast.

Several blogs have noted a possible Fibonacci price relationship of the SPX – March 2009 to April 2010 rally to the current bull phase.  This rally is the presumed Primary wave “1” of a still developing Elliott five wave impulse pattern.  The current bull move from March 2020 is either Primary wave “5” developing from the March 2020 bottom or the October 2020 bottom.  The reason Primary wave “5” may have begun in October 2020 is that an Elliott wave Horizontal Triangle may have ended on 10/30/20. Please see  the blog “Long – Term S&P 500 Alternate Elliott Wave Count 09-12-21” for additional details.  

Regardless of which count is correct, Fibonacci price and or  time relationships can be made from either point March 2020 or October 2020.  

A  partial listing of the Fibonacci sequence is (1,1,2,3,5,8,13,21,34,55,89,—– to infinity).

The SPX  March 2009 to April 2010 was 13 months a Fibonacci sequence number.

SPX  March 2020 to  December 2021 is 21 months a Fibonacci sequence number.

The Fibonacci relationships between the two rallies is 13/21 = .618 the Fibonacci “Golden Ratio”. Typically, there are Fibonacci price/time relationship between  Elliott impulse waves “one” and “five.”  The .618 ratio is a common wave “one” to “five” relationship.

Very short-term the SPX appears to be vulnerable to a decline until at least the last trading day of October 2021 and could spill over into the  first week of November.  Seasonally November is the most bullish month for US stocks.  If November 2021 is bullish and pushes the SPX to a new high in December it could be a historic top.  

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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