5-Year S&P 500 Chart – Target Hit

When we analysed the S&P 500 chart way back in May 2012, we made a S&P 500 forecast that it would hit a target of 1245 and recover to hit at least 1450. This S&P 500 forecast was made on 24 May 2012. This forecast was the medium term forecast. Well, the S&P 500 went as low as 1266 (our target was 1245) before recovering and hit a high of 1474 (our target was 1450). We do the comparison to highlight the forecasting power of Elliott Waves.

Now that the target is hit, it looks like the stock market has completed its final legs of the Elliott Waves for Primary wave B. This means that a trend change is likely to take place. It is still early days yet and the stock market needs to show us some further clues as to its longer term direction.

Here is the S&P 500 Chart that was published in May 2012.

S&P 500 5-Year Elliott Wave Analysis Primary Chart 23 May 2012

Here is the updated 5-Year S&P 500 Chart.

S&P 500 Chart - 5-Year Elliott Wave Analysis Primary Count 19 Dec 2012

This chart displays the Primary count and it displays the updated stock bars. We did not change the count labels as they are still valid. Also, the only trend line that is updated is the red one to show that S&P 500 has been cornered into a tight triangle and normally a strong break out takes place in such situations. Be wary that it could always break to the top side as well and don’t get caught by a throw over or throw under.

Following on the trail of the Primary count, this move to 1474 completes the Primary wave B. If that is indeed the case, then the S&P 500 is already in Primary wave C. As we have published before, the target for Primary wave C is in the lows of 500 points. This is likely to take place over a number of years.

Some of the things to note with regards to the stock market is the volume and the MACD. First of all, a healthy volume is a strong indication of a healthy market. I’m a fan of volume analysis as the volume tells a completely different story from the price. Look at the volume in the S&P 500 chart. See how light it is and it is clearly trending downwards. This is a very unhealthy market.

The MACD too is downwards bias. This is another indication that the move up on the S&P 500 is a very weak move. Every wave up formed a flat resistance top line on the MACD, until finally, the MACD clearly could not even touch the resistance line for the final wave up. Clearly the stock market is running out of steam and is turning down soon.