Several recent blogs have noted that the S&P 500 (SPX) could be headed towards major Fibonacci resistance at SPX 4889. This projection was based upon the presumed SPX – Primary wave “4” termination point made in late October 2020. The January to February 2022 decline may have changed the long-term SPX – Elliott wave count.
The monthly SPX chart courtesy of Trading View illustrates the changed long-term wave count.
Within Elliott motive waves there’s usually a Fibonacci relationship between wave “one” and wave “five.” If the 02/24/22 SPX bottom is now the termination point for Primary wave “4”, then the projection for Primary wave “five” is made at that point.
The growth rate for Primary wave “1” was 82.9% multiplied by the Fibonacci ratio of .236 equals a growth rate of 19.56%. Adding this growth rate to the presumed Primary wave “4” bottom of 4114.65 targets SPX 4919.47 as the termination point for Primary wave “5”.
After declines sometimes projections for the next top can be made using Fibonacci extensions.
The daily SPX chart illustrates a Fibonacci extension of the January to February 2022 decline.
The Fibonacci ratio of .1458 added to 1.00 equals a Fibonacci inverse ratio of 1.1458. This extension of the decline targets SPX 4921.29 close to the major Fibonacci resistance point at 4919.47.
If the post 02/24/22 rally continues it may peak in late March 2022. Depending on market action – details of this time target could be in a future blog.