Last week I wrote about the positive reversal signal generated in the weekly RSI on August 10 that pointed to a calculated minimum target of 1548.54. This target has now been realized. This event, along with a new all-time high in the cash S&P500, forces me to reassess my market view.
For other than “Elliott” reasons the new high forces a change in my thinking about the price structure since the 2002 low. This latest price bar on the weekly chart is classified as “uptrending”. The chart continues to show three “price pulses” from the mid-August low, which had previously led me to an a-b-c Elliott count. Now, with a new high in place, it is time to consider the idea that the a-b-c is really a 1-2-3. Just as important as new price highs is the fact that the weekly RSI never fell below 38 over the last few months. This indicates that the correction from July to August was within the context of an on-going bull market. This fact again leads to the thinking that another impulse wave began at the August low and not an a-b-c.
Additionally, it would appear that the August low marked a fourth wave low which means that we are in wave 5 up from that point. Wave 5 should itself be divided into an impulse pattern of five waves. Of these five waves I think that we are close to completing the third. Today’s chart shows this updated Elliott view.
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