Friday, January 20, 2023

SPX Update: It's Finally Decision Time

On December 16 (and a bunch of times since), I published the following chart, suggesting that the market would decline toward the 3775 zone, find support, then reverse and rally up toward 4010, where it would encounter the next inflection zone and have a decision to make:

As it turned out, the market bottomed at 3764, then topped at 4016.  Here's how that chart looks now (I haven't updated this chart since January 11, because Stockcharts always deletes all my annotations and makes me start over, which is annoying and time consuming and it's just not worth it anymore -- the chart served its purpose):

This (along with a million other examples that long-time readers are familiar with) is why, when people on Twitter act like Elliott Wave is some sort of mystical voodoo, I usually don't even bother to argue with them anymore.  I didn't publish 5 SPX alternate counts and eventually get a hit (nor do I generally count anything but the preferred count as a "hit" anyway), I published this one chart for more than a month straight, and it was so accurate (though I did have to nudge the labels a hair, of course) that I almost could have stopped publishing on December 16 and just waited for it all to play out (don't give me any ideas!).

So, the lines seem pretty clear from here.  Bears want to hold the 4016 high, bulls want to hold the 1/A low.  Keep in mind that the most bearish count here is exceedingly bearish, because if blue 1/A is 1 (and not A, or C of an expanded flat; too early to say for sure, hence the "?" from Dec. 16), then the market is at the beginning of a nested third wave decline that's likely to become the most significant and rapid sell-off this bear market has yet seen.  Third waves are often "crash" waves.  Trade safe.

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