S&P 500 Futures: Sustained Bottom Could Be In
2022.05.03 20:51
Over the last almost four weeks, I have kept you up-to-date on how the current ongoing correction in the S&P 500 futures Market (ES_F) should unfold using the Elliott Wave Principle (EWP).
On April 13th, I found:
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Let’s see what happened using Figure 1 below.
The index topped at $4509 (green wave-2), dropped to $4136 (green wave-3), rallied to $4303 and (green wave-4), and bottomed yesterday at $4056 (grey wave-iii/alt: v). Thus, using the EWP, I have been able to forecast each low and high, so far, weeks ahead of time.
That bakes the question: do news and other externalities drive the markets, or does the stock market marches to the beat of its drum?
S&P 500 Futures Daily Chart
Impulse lower unfolded as it should. Is it complete?
I determined the bulls had fumbled on April 13th, and the index has since followed a standard Fibonacci-based impulse pattern to the downside. Although it does not work this beautifully all the time, it does mean that a sustainable bottom is most likely in or very close.
Namely, one last stab lower (a final 5th of a 5th wave, i.e., grey wave-v of 5 of c of 4) deeper in the ideal Fibonacci-based target zone of ES_F3959-4024 can not yet be excluded. But it is not necessary; there are enough waves in place, and all the target zones set forth several weeks ago have been reached.
Or, as they say:
“Do not bank on the fifth of fifth waves.”
Bottom Line
Now that the ES_F got very close to my ideal target zone of SPX $4015+/-25 set forth several weeks ago, it is time to start paying attention to the possibility of a sustainable bottom in place. A move above ES_F $4303 will be an excellent first sign, with confirmation above ES_F $4509. If the index reaches those two levels over the next few days and weeks, the anticipated rally to 5500+ has most likely begun.
But as always, I will continue to monitor the price action to see if the market may have one more trick up its sleeve as that final stab lower cannot be excluded just yet.
