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SPX and INDU: Market Approaching a Turn?


This precise road map attempts to anticipate three coming short and intermediate turns.

MINYANVILLE ORIGINAL Friday's update expected further upside to follow after Thursday's expected test of 1425-1430, but the market instead made a slight new low in Friday's session. I suspect the upside was simply delayed a day as the correction became more complex. After studying a number of charts, I believe the odds are good that the market will rally over the short-term, and then reverse back down to make another marginal new low. From there, I currently expect it to reverse back up and make new swing highs.

It is possible that a more meaningful bottom is in place already, but the micro wave counts suggest this is slightly less likely (see charts); it is presently expected that the next low will be significant.

(If you're new to Elliott Wave analysis, it might help to familiarize yourself with the basics, as found in this article.)

Below shows the preferred short-term S&P 500 (INDEXSP:.INX) path in blue. If for some reason bulls fail to reclaim 1438.43, then all bets are off, and the short-term outcome would be more immediately bearish. My preferred outlook is that bulls will retake the 1438 level, and 1444-1448 is my current short-term target. Sustained trade above 1453 would suggest the alternate count of a failed fifth at 1426 -- which would mean the bottom is in, and there would be new swing highs directly (see second chart).

Click to enlarge

Stepping back a bit, the larger preferred SPX view is shown below.

Click to enlarge
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No positions in stocks mentioned.
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