S&P 500 Elliott Wave Analysis – 12 April 2012
The move up continued as in yesterday’s forecast albeit slightly short of the target level of 1395. This move up is either wave 3 or it is waves 3-4-5. If this was wave three, we can expect a sideways or a slight dip in the form of wave four before wave five kicks in to bring the S&P 500 to 1395. If waves 3-4-5 has completed, we can expect a more deeper correction to around 1370 before the next move up which is expected to go up to about 1420.
The upside is limited currently and thus, it is better to be in cash for now and wait for the next dip to around 1370 to go long.
The alternate count is that this is a corrective relief rally and once this is over, the S&P 500 will head lower below 1340. There are signs that this may also turnout to be the correct analysis. The alternate count will come into effect if the next dip is a strong vertical drop to below 1370.
S&P 500 Fibonacci Confluence
The Fibonacci level of 1381 was broken to the top side but it is interesting to note that the stock market went above 1381 and came back down a few points before heading higher. This is clearly seen in the 10-minute chart displayed here.
S&P 500 Volume and MACD
The daily volume is thin again. The daily MACD is flattening and might turn upwards without touching the zero line if the market heads higher in the next session. This would be a bullish indication as I had mentioned it in yesterday’s analysis. If indeed that happens, then we can expect the MACD to break out to the topside of the triangle that has formed (indicated in amber) and as we know, the break out from a triangle will be a vigorous move and that would setup a nice platform for Minute wave [z].