S&P 500 'E Wave' Ready to Rally to Bull Market Highs
A close over 1409 will confirm the "E wave" has begun in earnest.
In the case of the S&P 500 Index (^GSPC), we have had a strong rally from the 1267 lows in early June to 1409 highs so far (the C wave highs) and recently a pullback into the 1390s (The D wave). This next leg up should carry the market indices toward the 1440 2008 interim highs which begat the last 5 wave down leg of the bear cycle that ended at 666 on the S&P 500. A case of down the mountain and up the mountain, if you will, since the 2008 highs to current pricing conditions at 1404.
Once this E wave completes in the 1425-1445 ranges (with an outside shot at an extension blast to 1495) we should expect a fairly significant correction of the entire move from March of 2009. This final rally leg could top anytime between Aug 13 and August 22 as I last updated, with potential to spill over into early September.
A close over 1409 will confirm the “E wave” has begun in earnest; you may want to prepare yourself as it could be the final blast before some rains begin to pour in the fall.
Editor's Note: David Banister is the chief investment strategist and co-founder of ActiveTradingPartners.com, a small-cap portfolio and market advisory service.
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