The S&P 500 posted a new all time high yesterday at 1,912.28. This high was not confirmed by the DJIA, but then nothing indicates that a top is in place yet. If however, the none-confirmation between the S&P 500 and the DJIA remains then it should be a flashing red light.
Looking at the monthly chart, we are currently kissing and hugging the resistance line way back from the October 1987 low. A small divergence can be seen on the RSI indicator, both warnings that a top could be nearby, but then we don't have any hard evidence that is the case yet.
Zooming in on the daily chart, we can see the rally from early October 2011 clearly is impulsive, but it is also possible to count five wave since the October 2011 low at 1.074.77. Again we have divergence between the RSI indicator and price. Warning signs, but still no real evidence of a top being in place.
Zooming in further to the hourly chart, the rally since the 1,814.36 low in mid-April looks like a correction (A-B-C) rally. The first target for wave C will be where it equals wave A in length and that will be at 1,938.42, but we should also calculate the 61.8% length of wave A, which will give us a target of 1.910.59, this target has been exceeded slightly, but as we have a possible resistance line just above this target too, then we just can't push it aside. Here too we can see a minor divergence between the RSI indicator and price, again flashing the warning lights, but then we have no evidence of a top in place yet.
The conclusion must be, that we could be close to a top, but we need more evidence to draw the final conclusion. The first strong indication of a top will be a break below support at 1,899.78, but a break below 1,892.49 is needed to confirm that a top is in place for a strong test of the support line near 1,880. A break below 1,880 will add a strong downside pressure here.
If you like this post, then you should consider joining the Elliott Wave Surfer Service by clicking the link
0 Komentar untuk "Elliott wave analysis of S&P 500 - New all-time high "