It’s possible the S&P 500 (SPX) completed an Elliott wave – Inverse Horizontal Triangle, if so a multi- month decline may have begun. However, one important company Alphabet Inc. (GOOG) could be poised for a culminating rally.
The daily SPX chart courtesy of Trading View illustrates its prime Elliott wave count since January 2022.
The Inverse Horizontal Triangle that began in June of 2022 may have completed at the 04/18/23 peak. Note that sometimes wave “E’s” of Horizonal Triangles can have a throw over of the trendline connecting waves “A” and “C”.
Traders looking to short the SPX need to be patient, an important U.S. stock appears it could make a new post November rally high.
The daily GOOG chart shows its prime Elliott wave count from its February 2022 top.
The February to November 2022 decline counts as an Elliott – five wave Impulse. The subsequent rally from the November 2022 bottom appears to be a developing Double Zigzag correction. If so GOOG could rally above its 04/06/23 high.
If GOOG has one more rally the SPX could make a secondary peak below its 04/18/23 peak. Another scenario has the SPX exceeding its 04/18/23 top, which could change the short-term wave count ,but not the longer – term bearish outlook.
Whichever scenario plays out global stock investors could be on the verge of a decline that significantly decrease their portfolios.
Investors need to take defensive actions, sell at least 20% of stock holdings and use hedging strategies.
Traders in the short-term need to be patient. The SPX had an hourly RSI bullish divergence at the 04/26/23 bottom. There’s a good chance of a near -term rally. If the SPX can rally in conjunction with GOOG it could set up an excellent shorting opportunity.
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