On 12/23/21 the S&P 500 (SPX) moved above the high made on 12/16/21, this invalidated the Elliott wave count illustrated in the 12/21/21 blog. That wave count had the SPX 12/20/21 bottom as a supposed Minor wave “C” of a developing Elliott wave – Horizontal Triangle. If the 12/20/21 bottom was wave “C” then the subsequent rally would be wave “D”. To complete the Horizontal Triangle there would have to be a correction of the post 12/20/21 rally before the SPX exceeded the 12/16/21 top – the supposed Minor wave “B” of the Horizonal Triangle. The rally since 12/20/21 has been so strong that even on intraday charts there’s no decline that could be significant enough to be considered Minor wave “E” of the Horizontal Triangle.
The daily SPX chart courtesy of BigCharts.com illustrates one of several alternate Elliott wave counts.
In this Elliott wave count Minor wave “B” of a Horizontal Triangle could still be under construction. If so it implies the triangle could continue into January 2022 with a post triangle trust up in mid to late January 2022.
Some of the momentum evidence suggests the current rally could continue into the last trading day of the year 12/30/21. So far only the upper line of Slow Stochastic has moved above 75% – the overbought zone. MACD while having bearish divergences, there’s also a bullish crossover of the lines. Only the daily RSI has a solid bearish message with several bearish divergences.
On 12/23/21 the NYSE advance/decline ratio was 71% advances to 26% decliners. Nasdaq Composite had a ratio of 69% advances to 27% decliners.
The weight of evidence from these external and internal momentum indicators is bullish.
The 10/24/21 blog “Possible US Stock Market Top – December 2021” noted a major Fibonacci time cycle targeting a possible top in December 2021.
The 11/10/21 blog “Possible S&P 500 – Price Topping Zone” noted potential major Fibonacci resistance in the SPX 4860 to 4890 area.
If the SPX can rally into 4860 to 4890 on December 29th or 30th 2021 it could be a fantastic opportunity to go short.
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