This post presents a potential Elliot wave count to consider for the S&P 500 Index (SPX). It suggests the best of this late-cycle bull market may lie ahead, topping out in 2020.

The bigger picture

Firstly, let’s take a look at the monthly chart (Chart 1). The main idea here is that the period between the top around the turn of the new millennium and the low following the 2008 crash is part of a larger complex correction, labelled WXY. From this point, we see the start of a new impulse wave that takes us to where we are today. Wave 1 of this impulse takes us to the 1370 high in May 2011, wave 2 to the 1075 low in October that year, wave 3 to the top around 2130 in July 2015, wave 4 to the low around 1815 in February the following year and wave 5 to the top around 2870 at the start of 2018. Why not count wave 5 all the way up to the high of 2940 in September 2018? The answer lies in the daily chart.

Chart 1. SPX monthly. (click to enlarge)

Fractals

If we accept the September 2018 high as the top of wave 5 on the monthly chart, we can label the whole year 2018 as corrective. This corrective pattern and the ensuing impulse wave taking us to our present high of 2950 bear a striking resemblance to the large pattern analysed above on the monthly chart. In short, we have a potential fractal. A possible path for the rest of this impulse up is shown on the daily chart below (Chart 2).

Chart 2. SPX daily. (click to enlarge)

This would suggest that the best of the final phase of this bull market may lie ahead and that the SPX has the potential to break 3500 in an uptrend extending into 2020 before any sizable correction occurs.

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Disclaimer: I am not a financial adviser. Nothing in this post should be taken as financial advice. All content is provided for information purposes only.
All text and charts copyright @cryptolaidlaw 2019. All rights reserved.