S&P 500 target 4400
2023.01.27 04:02
S&P 500 target 4400
We will continue to keep an eye on the $4400 target as the SPX continues to move in the direction of our primary expectation. Specifically, last week, as the index had just reached its lowest point, we lacked sufficient price data to determine whether:
“Technically enough to consider the correction complete was the low at $3884, which is the 50% retrace of red W-i.”
Thus, we came to a close last week.
“Rod W-ii becomes more pronounced and divided, so we cannot yet dismiss it. Before green W-c descends to $3820-50, it may be in green W-b at around $3950+/-25. However, barring an irregular flat W-ii, red W-iii is essentially confirmed if the index closes above this week’s high.
Nevertheless, we “prefer[ed] to look higher in the short- to medium-term.” We will be much more cautious in anticipation of the blue C wave once SPX4300+ is reached.”
The index closed above the previous week’s high 100p later, less than a week later. As a result, our primary expectation of higher prices, which was based on the Elliott Wave Principle (EWP), was correct, and the rally to SPX4300 and higher ought to be underway. Figure 1 depicts the road map below.
Let us concentrate on the most important points because the chart above contains a lot of information:
From the January 2022 all-time high (ATH) to the October low, the S&P500 corrected for blue Wave-A (W-A). Since October 17 (see), Blue W-B, a counter-trend rally, has been our primary focus. Additionally, B-waves typically retrace between 62% and 76% of the initial A wave. That places us in the SPX4310-4505 target area (blue).
There are three waves in a B wave: black (major) waves a, b, and c. Wave c of W-B ought to be in motion at this point, breaking up into five smaller waves. Red waves W-i, ii, iii, iv, and v are currently in progress. In turn, it splits into five smaller waves as well: W-1, 2, 3, 4, and 5 are green. Last but not least, because the financial markets are fractal, green W-3 is probably already underway and will likely be broken up into five smaller waves: grey W-i, ii, iii, iv, and v. According to the EWP, c-waves within a corrective B-wave typically have a length equal to W-a or up to 1.618 times W-a.
That places us in the SPX 4375-4750 (black) target zone. Additionally, the 5th wave typically reaches the first wave’s 200 percent extension, as measured from the second wave low. As a result, the ideal red W-v of black W-c should be $4395+/-5.
We have a confluence of three distinct wave degrees when we combine these three facts: SPX4395+/-, SPX4310-4505, and SPX4375-4750. As a result, SPX4300-4400 ought to be our main focus.
The index should be represented by grey W-ii of green, W-3 of red, W-iii of black, W-c of blue, and W-B. This may sound like a mouthful, but it basically means that the index has higher highs and lower lows. That sequence is bullish.
In addition, the index surpassed the trendline that had restrained all upside between the ATH and the middle of January, as well as its 200-day simple moving average (the solid red line in Figure 1). Bullish until proven otherwise, both are significant developments.
What might that “otherwise” entail? first, a break below the low of yesterday, then a break below the low of last week. We continue to see no reason why this bull run that we have been following since the middle of October should not continue.
