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S&P 500 Has Been Flat Over 12 Months: Expect More Whipsaws

08/19/2019 11:21 am EST

Focus: TECHNICAL

Avi Gilburt, Esq

Founder, ElliottWaveTrader.net

Avi Gilburt points out that the S&P 500 has been flat from mid-August 2018 to now. He expect recent whipsaw action to continue.

So, as the bulls pat themselves on the back for holding all the way down last year for a 20% draw down so that they can “enjoy” the rally we got in 2019, I hope they don’t hurt their arms and shoulders from all their back-patting. But they may be in for a dose of realism when they realize that the market has now been completely flat for the last 12 months.

On Aug. 14, 2018, the SPX closed at 2839.96, one year later, Aug. 14, 2019, the SPX closed at 2840.60.

Think about that. Long only traders lost a tremendous amount of opportunity over the last year by holding during the 2018 20% decline. 

Now, how many foresaw this potential over the last year? Well, we did. And, we even earned more than 20% during that time with the money we took out from the market last fall. 

And, it may even get worse before things get better. As we warned several weeks ago, it was time to prepare for wild whipsawing market action. Thus far, the market has certainly followed through. 

Over the coming weeks, I still foresee the S&P 500 breaking down towards levels below 2700. However, we will likely see further whipsaw over the coming week before that decline may begin in earnest.  

While the details of the continued whipsaw potential can in the charts below, as long as the SPX remains below the 2950-2980 resistance area, expect for the market to break down below the 2700 region in the coming weeks.

inx

SPX 60-minute

1SPXdaily

SPX Daily

Should we see this downside follow through in the coming weeks, the action we then see in the last quarter of 2019 will tell us whether we will begin the rally to 3800-4100 sooner rather than later, or if the market will ultimately point us back down towards the 2200 region over the coming year before we begin that rally to 3800-4100.

Avi Gilburt is a widely followed Elliott Wave analyst and founder of ElliottWaveTrader.net, a live trading room featuring his analysis on the S&P 500, precious metals, oil & USD, plus a team of analysts covering a range of other markets. He recently founded FATRADER.com, a live forum featuring some of the top fundamental analysts online today to showcase research and elevate discussion for traders & investors interested in fundamental rather than technical analysis.

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