Stock Market Bears are Losing the Battle

In  Elliott wave theory the most powerful bullish or bearish formation is referred  to as  a series of “one’s” and “two’s.”  In a bull market, using standard technical chart patterns this would be a rally followed by a base, then another rally/base.  The rally after the second base is usually enormously powerful and dynamic.

The 30 – minute S&P 500 (SPX) chart courtesy of Trading View illustrates a textbook example of a series of “one’s and “two’s” in a bear market.

The break below what is  illustrated as Sub Minuette wave “i” usually produces a decline much larger than the prior two drops.

To the left of the textbook example illustrates  the action of the SPX after its 03/29/22 peak.   The presumed SPX Sub Minuette wave “i”  low also corresponded to a double bottom at 4450. This double bottom was examined in the 04/09/22 blog “Important Double Bottom and Top”. The double bottom at 4450 was an added bonus for the bears, a break below this structure by itself could have caused a sharp drop.

From a  price pattern setup, the bears had everything going for them to smash stock prices down.  As of 04/14/22 they’ve only managed a marginal decline below the important support at 4450.

In addition, internal momentum indicators – examined in  the 04/16/22 blog “Bullish Momentum Signals – 04-14-22” show the bears are losing strength.

Fibonacci and lunar time cycles  point to a possible bottom on either 04/14/22 or 04/18/22.

Evidence from three of the four market dimensions of; Price, Time, and Momentum are  bullish.

Traders  have an opportunity to go long  50% non-leveraged SPX related funds at the SPX open on 04/18/22.

Use a move below SPX 4315.00 as a stop loss on half of the position. If the SPX opens below 4315.00 – do not go long.

Use an SPX move below 4250.00 as a stop loss on the remaining  half of the position.

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.

2 thoughts on “Stock Market Bears are Losing the Battle

  1. I am curious why you chose April to examine the battle between bulls and bears. Have you taken a look at the possibility that there is a powerful ongoing bearish move using a longer time frame? The one/two movements are easily idenfied on a longer time frame with key bottoms taking place on 1/24 and 2/24. We may be in the early stages of a new downward wave that began at the end of March. I am not convinced one way or the other, but it certainly seems like there is a possibility of more sharp drops coming in April/May.

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  2. Yes this could be there early stage of a new downward wave. My blog just after the recent double bottom at SPX 4450 illustrated an alternate wave count that had the SPX 03/29/22 peak as Minor wave 2. The choppy wave action since the 03/29/22 top is the strongest evidence that there could be one more rally to at least the 01/04/22 high.

    If within the next few days or weeks if there’s strong downside action, specifically breaking below the 03/14/22 bottom I’ll change my opinion.

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