S&P 500 Chart 5-Year Elliott Wave Analysis – 05 May 2013
This is the S&P 500 Chart 5-Year Elliott Wave Analysis. The S&P 500 has made a new historical high for the past two weeks. A long term review of S&P 500 is in order. First up, let us review the Weekly S&P 500 Chart.
Here’s the 5-Year S&P 500 Chart. There are a lot of Elliott Wave blogs which label the Primary wave [X] as an impulsive wave 1 or a new bull cycle. I cannot see any impulsive character in this wave. First of all, the volume has been diminishing as the S&P 500 progressed upwards. Secondly, the MACD which is a good indicator to confirm the wave count is pointing to a corrective pattern rather than an impulsive pattern. Just look at the MACD and you will immediately notice a characteristic signature of triangle. We have noticed that triangles always have MACD that oscillates about the zero line. This is also the case here.
This is the Primary count that we have for S&P 500. The Primary count labels the move since March 2009 as a W-X-Y corrective wave of Major degree. Major wave (Y) is best labelled as an ending diagonal based on the internal sub wave structure. The wave that is in progress is the Minor wave 5 of Major wave (Y). We believe that a top in S&P 500 is very near as the wave count is near to a completion. There are Fib confluence region around 1650 which we think is a likely top for S&P 500.
S&P 500 Monthly Chart
The Monthly S&P 500 Chart shows the larger degree wave count. One of the important reason that we show this chart is to highlight the volume information. Look at the volume and how it is trending down with each upwards move on the S&P 500.
The wave count is labelled as Primary wave [W]-[X]-[Y]. As highlighted in the weekly chart, S&P 500 is near the end of wave [X]. One of the popular wave structure in the monthly chart is the expanding triangle scenario as highlighted. This gives a target of 500 points for S&P 500. Wave [Y] could also turn out to be a sideways contracting triangle and it may not go as low as 500. It is still early days yet to delve into the wave [Y].
The S&P 500 Chart is clearly showing weakness in the fundamentals (volume and MACD) and as the price level approaches a long term trend line, it is important to be prepared for any trend change.