Why is the Market Not Trading on Fundamentals Lately?
So, unfortunately, there will be times like this where the market does hide its true short-term intention. But, I believe most market participants should take a step back and recognize where we are in the bigger picture.
Last year at this time, we had our sites initially on the 2300-2330SPX region for 2016, as you can see from the attached re-cap of our market calls through 2016.
While we certainly struck that region as we expected, we then moved our thoughts for 2017 towards 2410-2440 for wave (iii) of (3), which was also struck as expected, which then elicited a pullback towards 2333SPX, which we expected to be struck for wave (iv) of (3). As you can see from the chart below, the market has been acting in an almost textbook fashion in between our Fibonacci Pinball target regions.
We then focused our attention towards our next bigger target in the 2487-2500SPX region, where we expected that wave (3) would complete. Currently, we stand just below the target region we set last year for wave (3).
And, as I reminded the members of my trading room this past week:
“You see, we have now just about struck the 1.618 extension of waves (1) and (2) off the February 2016 lows, which is the most common target of wave (3). Moreover, we are striking the 2.00 extension of waves (i) and (ii) within wave (3), which is also where wave (v) of (3) commonly tops.