Large Scale Monthly Elliott Wave Chart of SP500
Courtesy of Corey at Afraid to Trade
Per multiple reader request, I’m providing the “bigger picture” backdrop against which to classify past and possibly future price structure in the S&P 500. Let’s take a look at one of the most mainstream Elliott Wave counts and projections on the S&P 500 Index (monthly).
(Click for Larger Chart)
Many Elliotticians agree that we completed a large-scale Third Wave into the 2000 highs and that we are now in a 10-year Fourth Wave correction phase that began off the 2000 highs.
This Fourth Wave will (has) subdivide into a three-wave corrective phase as all fourth waves do. Wave A was the move from 2000 – 2002; Wave B up was the bull market from 2003 – 2007. We are now structurally in Wave C down.
To step it into more detail, Wave C subdivides into a Five-Wave sub-structure (fractal). We have already moved four waves of that expected five wave structure.
Technically, the entire move from 2000 to present has been an “Expanded Flat” where Wave B made a nominal high and Wave C is expected (has already) made a new low beneath the “A” Wave.
That is the historical count in which we trade and invest currently. Wave C is much, much closer to its end than its beginning, but many Elliotticians agree that we have one more wave to the downside to finish-out the C wave before putting in a bottom and rallying off these levels – perhaps as low as 550 on the S&P 500 (an exact discussion on targeting is beyond the scope of this post).
With that being said, the rally from the March 2009 lows to present (if not even the November 2008 lows) has been a fractal Primary 4th Wave rally that targeted the 1,000 index level.
It now appears this rally is also coming to an end… if not has already ended already.
Whether or not we pop higher from here to challenge the 1,000 level, the future Elliott Wave pathway seems to call for one more swing down to test – at a minimum – the 666 lows from March (which would be a 5th wave truncation). I get the sense that most seem to believe we will be breaking these lows.
Any Elliott Wave posts I do will be based on this background structure you see here.
Corey Rosenbloom, CMT
Afraid to Trade.com
