Today’s closure can be considered as a first step towards reversal and instills some optimism. However, the optimism exists only at the daily frame. All bigger frames are still bearish.
Let’s evaluate from different angles.
This SP500 overview contains the charts and covers:
– SP500 and other indices – TA and Japanese Candlesticks analysis;
– short and long term charts and forecasts for SP500.
If you want to learn about perspectives for Nasdaq, Dow Jones, Russell, FTSE, DAX, CAC, ASX and NIFTY, the Weekly Analyses were updated over the weekend and can be viewed here:
The candle formations are bullish for all ETF above. However, the technical support is rather weak and a much stronger one is required for confirming a reversal.
The recently made “death” crosses do not provide confidence about a possible reversal either. The majority of other monitored indicators are yet to flip bullish.
At times of uncertainty, a little zoom-out would help. If we look at the 3-day candles (above) for SPX, we could notice that the index presumably consolidates before moving lower, forming a Falling 3 Methods candle formation.
There is nothing bullish yet on this chart, but we should remember that the bullish odds are never zero.
ELLIOTT WAVES – SP500
The long term forecast was first charted in September and simplified in December. The detailed analysis was 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/
The most recent chart can be viewed in the weekly analysis.
SP500 Short Term
We have been tracking these paths since February 5th. So far, we have not seen an event that would trigger a change.
- Red (primary).
Main hypothesis – a complex wave B ended and wave C has started.
Minimal target: $3850.
Target area: $3230-80; the most probable – $3248.
Wave 5 of C is underway.
This is the possible micro counts.
SPX (and other indices) formed bullish daily candles. However, the technical support is weak and the larger frames are still pointing downwards.
The indices have a good chance to build upon today’s success and confirm a short-term reversal that could lead to a confirmation on the weekly frame that is required for the recent damage.
Until the weekly confirms, I continue to maintain the bearish targets identified at the beginning of February.
Mid Term Forecast:
(unchanged, copy from the previous six weekly analyses)
Targets: $3850-3250, or 20-33% loss off the top.
Minimal target – $3850 or 20% loss.
Possible timing – mid April.
For a complete picture, it is highly recommended to read the daily VIX analysis:
*** End of Analysis
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