(Dec 26, 2019) – On the recent post “Climbing the Steps – The Fall Grind,” I discussed an upside target that both of my Elliott Wave counts were pointing to, which was 3231 on $SPX (S&P 500 Index). That target was achieved today, with a push within the 2019 “Santa Rally” now in late December.
Now we’ve come to a point where it’s possible that wave C could conclude within the above “caution zone” as long as price remains below 3333.40. However, there is no notable divergence on the daily time frame into the target area (yet), which implies – at least for now – that higher highs are still ahead.
What rubs me the wrong way about a completion at this level is how price action developed along the way. A strong move, and steady grind higher. Jaw dropping at times, with recurring gap-up moves along the way. Looking beyond the Elliott Wave triangle count, one could argue that this current move is impulsive and still has much higher to print before the sequence completes. I’ve plotted a daily of the S&P Futures to display this bullish impulsive count.
Noting strength into the highs, the steady grind from lower channel rail, the bullish coiling compression (the (1)-(2)-1-2 build before grind move), an impulsive count aligns with this current move as a third wave. Even more, it’s likely within a third wave, which could potential be within a greater third wave… which basically spells a strong move that is likely to continue, and that the S&P Futures may have room to 3771 or higher. While the blue uptrend holds, odds are that the upside strength continues. While black channel structure holds, odds are that uptrend continues.
These counts have both been followed closely with members of TraderMentality.com’s premium service for some time, targeting that first ideal extension that we saw today. If you have any interest in expanding your knowledge of market structure, Elliott Wave counts and general discipline when trading, consider becoming a member.
“Ending” or “completing” moves are typically accompanied with divergences & waning strength into higher highs. So far, I don’t see any signs of that here. With the Fed expanding it’s balance sheet into mid-2020, it further backs the bullish thesis of a continued grind into 2020. Is a repeat move of 2017-2018 possible? Has “BTFD” mentality returned? Sure starting to feel a lot like it. While pull backs will still occur just as they have before, the potential for a repeat move certainly isn’t off the table…