The weekly chart of the cash S&P500 index formed an “outside” price bar with a higher close this week. The downward price pulse from the recent 1552.76 high is confirmed complete at the 1406.10 low.
Technically it was an important week as the RSI formed a positive reversal and; when viewed with the Composite Index, flashed an outright “buy” signal. These events occurred after a price low at the long (green) moving average which was just above our target box of 1390-1402. The RSI reversal indicates a minimum target of 1569.44. This is about 10 points below the monthly reversal target discussed yesterday, but note that they are “minimum” targets. At the very least they point to a retest of the all-time high.
Although I always have more than one possible Elliott Wave count they all share the common theme that we are forming a corrective pattern from the July high. Furthermore, I continue to believe that the move down from 1576 to 1406 was wave “c” of that correction. My other thoughts continue to be that:
1) We will hold the August low during the current correction.
2) That the correction will terminate by the end of the calendar year.
The key Elliott question is whether wave “c” is over, not whether it ended the correction. Personally, my preferred count is that the pattern best fitting the weekly chart is a Contracting Triangle from the July high. But it doesn’t matter at this point. Is wave “c” over at 1406? I think the weekly technicals are saying “yes”, but first we will have to see if resistance can be broken at the 1490 level.
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