On 12/07/22 it appeared that US stocks could continue to decline. Evidence on 12/08/22 from the price and momentum dimensions imply that the wounded bull market could be recovering.
To discover the best Elliott wave count, examine several stock market indices, sector ETF’s and sometimes individual stocks. The prior blog noted that the S&P 500 (SPX) rally after the 12/06/22 bottom was choppy and shallow – the look of a corrective pattern. However, the intraday Elliott wave count for the NYSE Composite (NYA) could be the early phase of an extended Impulse wave.
The NYA – 15 – minute chart courtesy of Trading View illustrates what could be the prelude to a strong rally.
The NYA from its 12/06/22 bottom appears to be forming an Elliott wave series of “one’s” and “two’s”. In a rising trend this is the most bullish Elliott wave configurations. If correct, the next rally could be powerful and push most US stock indices above their respective 12/01/22 highs.
A break below important support at NYA 15,285.06 will invalidate the bullish pattern and could lead to a new post 12/01/22 decline low.
A break above important resistance at 15,452.76 could trigger a very dynamic rally.
The hourly NYA chart shows that momentum has probably shifted to the bull side.
Today, 12/08/22 hourly MACD had a bullish lines crossover. On 12/06/22 hourly RSI moved above its moving average line and continues to stay above the line.
The most likely action on 12/09/22 is that the NYA moves above 15,452.76. If so it could be just the beginning of a strong rally.