The S&P 500 massive decline and the subsequent rally makes Elliot Wave sense.
The coronavirus 35% sell-off was a classic five-wave EW impulse pattern. According to the theory, this implies that at least a three-wave correction should be expected.
In SPX's case, the 28% rally that follows the decline is in three-wave so far and taking the shape of an a-b-c zigzag corrective pattern.
Not only that, but the price has also already retraced 50% of the decline and testing an important weekly resistance level.
I'm not interested in catching the top, so I will wait for price action to confirm this scenario. The breaks of the counter trend line and previous swing low at 2656 area will be a good confirmation that the bears are ready for the run.
Price has the potential to move below the previous low in the anticipated decline.
Do you think S&P 500 has already bottomed? Let me know your view in the comment.
The coronavirus 35% sell-off was a classic five-wave EW impulse pattern. According to the theory, this implies that at least a three-wave correction should be expected.
In SPX's case, the 28% rally that follows the decline is in three-wave so far and taking the shape of an a-b-c zigzag corrective pattern.
Not only that, but the price has also already retraced 50% of the decline and testing an important weekly resistance level.
I'm not interested in catching the top, so I will wait for price action to confirm this scenario. The breaks of the counter trend line and previous swing low at 2656 area will be a good confirmation that the bears are ready for the run.
Price has the potential to move below the previous low in the anticipated decline.
Do you think S&P 500 has already bottomed? Let me know your view in the comment.