Yet another downtrending price bar on the daily cash S&P500 chart. The downward price pulse from 1520.77 continues and that high price on 11/06 is now a fractal high.
The last technical signal on the daily chart was on October 10th when the Composite Index failed to confirm the RSI’s new high. That coincided with the 10/11 “b” wave peak in the weekly chart. As of this morning we are still waiting for a daily chart “buy” signal.
From an Elliott perspective my best attempt at a wave count is that we are in a “c” wave which is part of either an Expanded Flat or Triangle that began at the July high. If “c” is part of a Triangle it will itself be an “a-b-c” pattern. If part of a Flat it will be a “1-2-3-4-5”. In both of these options the “c” or “3” waves will themselves be five waves. Therefore, we may have just completed iii” of c’ or iii” of 3’ yesterday.
How low can the larger “c” go? Yesterday I laid out support levels from a weekly chart perspective. Today’s chart shows shorter-term support levels – and we reversed at one yesterday with a strong rally late in the day. The only thing I don’t like about this Fib cluster is that it is not accompanied by a Gann target.The next area of support does have a Gann target. That is the 1432-1438 area. Underneath that is the 1413-1417 zone mentioned yesterday. Notice all the hits there on today’s chart.
Bottom Line: I’m still on the sidelines. The market did not react at the 1468-1469.5 or 1459.5-1463 areas and I still don’t have a technical buy signal. Now I will watch to see whether previous support around 1490 has become resistance.
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