S&P 500 Update: How Low Can It Go Before a Sustained Bottom Is in?

S&P 500 Elliot Wave Technical Analysis

Over the last few weeks, see, for example, here and here, I kept you abreast of how the current ongoing correction in the S&P500 (SPX) should unfold using the Elliott Wave Principle (EWP). So far, the index has not disappointed. Namely, the anticipated multi-day bounce to SPX4500-4534 came and went as the index topped at SPX4513, right in the ideal target zone on April 20^th. Now the S&P500 is trading at the low 4200s. Thus the forecasted “subsequent decline to ideally 4150+/-25 … (green c/3).” is underway. See Figure 1 below. Thus, the EWP has been a fantastic, accurate, and reliable tool to forecast the stock market’s next moves well in advance. Something my premium major market members can highly appreciate and use.

S&P 500 Forecast

So, the question is, “what’s next?”

Figure 1. SPX daily candlestick chart with detailed EWP count and several technical indicators

Correction is unfolding as it should.

Albeit one always has to “anticipate, monitor, and adjust,” for now, the index is progressing as anticipated. I see, therefore, no reason to change the next part of my forecast: “Once that target zone [4150+/-25] is reached, the index should bounce again to 4315+/-25 (4), followed by a final decrease to 4050+/-25 (green wave-5, of red wave-c, of black wave-4).” other than a minor tweak in that wave (c/3) could stall at the 123.60% extension (SPX4185+/-5), and wave-4 could bounce back to as high as the 61.80% level (SPX4345+/-5).

Bottom Line

The EWP continues to run supreme because last week, the S&P500 bottomed right where I thought it would, 4375 vs. 4370, and staged the anticipated rally also right to where I thought it would; SPX4500+/-25 vs. 4513. The expected subsequent decline to ideally SPX4150+/-25 (green c/3) is now underway, but it could stall at SPX4185+/-5. I, therefore, continue to expect a bounce soon -within the next few days- to ideally SPX4245-4345 before the last leg lower of this significant correction that started January 4^th completes at ideally SPX3975-4040.