SP500 – Road Map
“Houston, we have a problem.” In this short analytical piece, we discuss the road maps for SPY and ES futures. Let’s see where Elliott Waves, supported by candles and other technicals, could lead the S&P 500.
Elliott Waves
Both downside waves in SPY and ES are still fresh, but they show enough impulsive qualities that the hanging threat is impossible to ignore.
The wave ES is forming is continuous, thus more reliable from an EW perspective, and its signals carry higher weight. The very first wave off the top was a clean impulse, and the index is now trying to form an impulse of a higher degree. Some might argue we already have five waves down; yes, but the third wave is the shortest among the 1st, 3rd, and 5th, which makes that count invalid. If a higher-degree impulse is in play, it would approximate the shape outlined in red.
If the index makes only one more lower low before a bounce, I would treat it as an (a-b-c) in blue. If the decline continues to respect the channel, the main events are expected over the next three trading days, which will close the weekly and monthly prints. If we take the recent signals from candles and technicals at face value, then Houston indeed has a problem. Let’s see how it resolves in the next three days.
As discussed on September 24: “My theory—event-based speculation—is that this correction will likely be sharp and relatively shallow, lasting about 2 weeks.” That hypothesis stands.
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Happy Trading!
