Why is the Market Not Trading on Fundamentals Lately?

Focus: STOCKS

Avi Gilburt, Esq Image Avi Gilburt, Esq Founder, ElliottWaveTrader.net
They are both coinciding around the 2500SPX region, which is what we consider a strong confluence region for a top to be struck in wave (3).”

Moreover, as I explained to the members in my trading room several weeks ago, the daily MACD on the SPX has been providing us evidence that strongly supports our expectation for the market to be topping out quite soon in all of wave (3) off the February 2016 lows. We have seen the divergences we would normally see at each stage of this rally, and the current divergences may need one more micro divergence before wave (3) is done. But, the patterns and divergences are matching up quite nicely to suggest that the market is just about done with wave (3).

So, my main expectation is that the market will likely be topping out shortly in all of wave (3) off the February 2016 lows, and providing us with a wave (4) pullback, with an ideal target in the 2300SPX region. While it is possible it may shorten and find support as high as 2360SPX (assuming it may trace out as a triangle), I fully expect to see a multi-month consolidation begin shortly. A strong break out over 2525SPX would make me re-evaluate this immediate potential.

See charts illustrating the wave counts on the S&P 500.

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