Charting The S&P 500: 5 Waves Nearing Completion

S&P 500 Nearing 5 Waves Higher Completion (Elliott Wave)

The S&P 500 (INDEXSP:.INX) has made an epic run from the March 2009 low of 667.  But good things only last so long… that’s how it goes on any timeframe.  In this case, it’s a longer-term one.

In my opinion, the price action shows we have completed a full 5 wave pattern using Elliott Wave Analysis. After such a long run, we should see an A-B-C correction coming shortly. With extremely overbought conditions and the final 5th wave completing after the November election, I don’t think now is the time to purchase. The risk reward ratio on this trade is way out of bounds because a properly placed stop would rest under 2040. During the coming price correction, we want to see the 2050 area hold. Anything below 2000 could cause a lot of stop running and accelerate the downside movement. Unfortunately, John Q Public often enters trades too late. The fear of missing out combined with an uncontrolled ego is a recipe for trading disaster. The video below provide additional analysis and insight.

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Twitter:  @MaximusAnalysis

The author does not have a position in any of the mentioned securities at the time of publication.  Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.