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Monday, February 27, 2017

SPX Update: Market Pulls a Little "Gotcha!"


We just saw an interesting near-term pattern unfold, one which often fools both novice and experienced Elliotticians alike.  What I believe we just saw is shown below, and it often confuses people because the fifth wave did not exceed the b-wave highs, although it did exceed the third wave high, which is all it's "required" to do:



The question is whether blue (4) is complete yet or not.  If it is, then we're likely only about half-way through blue (5), so we would be looking at 2379-83 as the next target.  If the rally stalls here and reverses, then blue (4) may become more complex.  In the event 2353 fails, then we'd watch the 2343-48 zone for a potential (4) bottom.  Do be aware that since this is a fourth wave at higher degree, it can run lower than that zone if it wants, and the invalidation levels for a fourth wave is way down near 2300.

I've added a few more numbers to the long-term chart, just on the most recent subdivision of the current rally, mainly for perspective.  Lately, waves have been acting a bit funny, so I'm not saying this is "fer sure THE count, man!" -- it's merely the most obvious way to count the waves currently, so it's more a "working" count for perspective purposes.



In conclusion, we don't have any glaring wave patterns indicating a reversal yet, and the longer-term trend remains up.  We could certainly see a more complex fourth wave unfold, however -- but that's not predictable at present, so we'll simply have to react in real-time if it occurs.  Trade safe.

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