Indices closed today with very optimistic candles. Let’s have a closer look.
This SP500 overview contains the charts and covers:
– SP500 – TA and Japanese Candlesticks analysis;
– short and long term charts and forecasts for SP500.
TA & CANDLES
The monthly and weekly candles were discussed in details in the weekly report. Both
QQQ and IWM closed the day with strong Piercing Line candles. SPY was battling until the last seconds and finally climbed over the mid point, joining QQQ and IWM.
DIA, though, is a concern. The candle formation there is far from bullish.
Overall, the first step towards reversal is made and a confirmation tomorrow could seal the deal and flip the weekly odds.
Technically though, the daily trends remain bearish and I hope to see the first signs of technical reversal tomorrow.
At the same time, the monthly and weekly odds remain bearish until negated. Tomorrow will be a crucial day for the weekly odds.
We also should remember that if SPX closes on February 28 below the January’s low, it will moving lower, at least to $3850 and quite possibly towards $3250.
ELLIOTT WAVES – SP500
This long term forecast was first charted in September and than simplified in December. The details were posted on January 20 and there have been no changes since: 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 is underway. So far, the wave down looks motive and it is possible that SPX worked wave (4) of iii of C, as on the chart on the left.
The target area: $3230-80; the most probable – $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.
Indices need to close above the Feb 23 high tomorrow in order to confirm a reversal. If they fail, the odds will continue to stay bearish. While QQQ is in the best position, DIA would have to make a huge effort. We will see how tomorrow and the week closes.
If SPX closes on February 28 below the January’s low, it is moving lower, at least to $3850 and quite possibly towards $3250.
Mid Term Forecast:
(unchanged, copy from the monthly analysis)
Expect SP500 to move lower in February, most likely in the second half.
Targets: $3850-3250, or a 20-33% loss off the top.
Minimal target – $3850 or 20% loss.
Link to the Weekly Analyses
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