The NDX odds yesterday were so bearish that our analysis suggested that “…it would be somewhat close to a miracle if NQ goes higher tomorrow. Similar formations (just not that strong) were completed by SPX, DJI and RUT.”
Feb 16 analysis can be fully viewed here:
Today the bears sent a few strong signals and these signals keep piling up, increasing the odds for the long term forecast above. Let’s evaluate the indices from different perspectives.
This Overview contains the charts and covers:
– SP500, Nasdaq, Dow Jones and Russell – TA and Japanese Candlesticks analysis;
– short and long term charts and forecasts for SP500.
TA & CANDLES
Let’s start with ES futures. As you can see on the first chart, ES completed two combos. A Tower Top (circled blue) and a Falling 3 Methods. Both are among the most influential bearish multi-candle formations, suggesting a continued move southbound. Both were formed with several supporting technical events.
NQ has completed similar formations and seems to be leading the pack towards a 50/200 DMA bearish cross that is often referred to as a “death” cross and for a reason.
DJI is a bit behind and is getting ready for a 50/100 DMA cross.
RUT is thinking whether it should break a bearish flag now or better do it next week.
A separate study on RUT was posted earlier in the blog:
Overall, the daily candle formations and technical indicators are pointing down. All indices have a very good chance to form strong bearish combos on the weekly frames tomorrow.
ELLIOTT WAVES – SP500
The long term SP500 forecast was discussed on January 20 (no changes): https://investingangles.com/2022/01/20/sp500-long-term-forecast-bear-case-20-01-2022-spx-spy-sp500-es_f-elliottwave/
SP500 Short Term
We have been tracking these two possible paths since February 7th. So far, we have not seen an event that would trigger a change.
- Purple (primary).
Main hypothesis – wave C has started. So far, the wave down looks motive and it is possible that SPX is entering wave iii of C, the heart of decline.
The target area: $3230-80; the most probable, calculated by Golden Section – $3248.
Alternative target: $3850.
Timing for the primary target: March 11-18.
SPX could make a more complex wave B.
The red count has the lower odds at this point.
MID-LONG TERM FORECAST:
(copy from the previous two weekly analyses)
Expect SP500 to move lower in February, most likely in the second half.
Targets: $3850-3250, or 20-33% loss off the top.
Minimal target – $3850 or 20% loss.
Short Term Forecast:
(copy from Monday)
The indices are likely to move mostly horizontally or slightly upwards in the next 1-2 days. Expect the move downwards resumed after this pause.
From the Monthly forecast on January 30:
The indices could rally in the next 1-2 weeks, the rally could possibly experience many unexpected movements (see-saw).
Short Term Target: $4500-4680.
Keep in mind that this is an attempt to forecast a wave B, the most unpredictable among the corrective waves.
Link to the Weekly Analyses
This weekly video discussed the perspectives that SP500 is experiencing now:
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