The 03/13/24 blog “S&P 500 – Elliott Wave Pattern From October 2023” illustrated that the S&P 500 (SPX) may have completed a Minor wave “4” decline on 03/11/24. Subsequent action suggests Minor wave “4” could still be developing.
The 30-minute SPX chart courtesy of Trading View illustrates the action since late 2023.
Within five – wave motive patterns there’s usually Fibonacci price/time relationships between waves “two” and “four”. The 03/13/24 blog noted that in time, the 03/08/24 to 03/11/24 decline was .236 the size of the 12/28/23 to 01/05/24 drop. The late December to early January decline was 74 – 30 – minute bars. The SPX 03/08/24 high to the 03/15/24 session close is 81 – 30 -minute bars. If Minor wave “4” is still developing, Minor wave “4” could be close to equal in time with Minor wave “2” – Fibonacci 1/1 ratio. This implies Minor wave “4” could be completed early in the 03/18/24 session.
From a price perspective, if Minor wave “4” goes below the 03/11/24 bottom, a logical termination point is a Fibonacci .236 retracement of Minor wave “3” The exact level is 5,069.57.
The next 30 – minute SPX chart zooms in on the action since early March.
Another potential level where the presumed Minor wave “4” could terminate is at 5,078.18. This is the point in which Minor wave “4” equals the decline of Minor wave “2”. The late December to early January drop was 111.08 points. The SPX 03/08/24 high was 5,189.26 subtracting 111.08 points equals 5,078.18.
Within either Single or Double Zigzag corrections a common Fibonacci relationship is equality between the first and third parts of the correction. In a Single Zigzag wave “A” equals wave “C”.
The rally after the 03/11/24 bottom has two possible wave counts. The wave count illustrated has the choppy rally on 03/11/23 as Minuette waves ( a ) and ( b ) with a large Minuette wave ( c ) of Minute wave “b” terminating at 5,179.87. Another interpretation has a truncated Minuette ( c ) of Minute wave “b” topping on 03/13/24 at 5,179.14. The price difference between the two wave counts is insignificant. For simplicity the 5,179.87 peak is considered Minute wave “b”.
The 5,081.75 level is where Minute wave “c” equals Minute wave “a”.
The three levels for a potential Minor wave “4” termination are: 5081.75. 5078.18. 5,069.57.
Three Fibonacci coordinates in proximity implies powerful support.
Also note that the decline from the 03/12/24 peak has been choppy. This is typical of a market struggling to go lower.
Internal Momentum is bullish. On 03/15/24 the SPX declined .65% with 57% of the NYSE stocks advancing vs 41% declining.
Another alternate Elliott wave count could be a developing Horizontal Triangle. In this wave count the SPX would not break below the 03/11/24 bottom. The SPX could trade sideways for one or two trading days before resuming the trend up.
Whichever wave count develops, price patterns and momentum imply more upside action.
The next and possibly very important Fibonacci resistance is at SPX 5253.
Four Dimension Trading 