SPX broke an important Elliot Wave rule, which was not to overlap any waves in conjunction to its trend.
We labeled Int Wave iii (1777 SPX) the possible Major Wave 5 component since Aug2013 rally. Just last Thurs and Fri, SPX broke below intraday to as low as 1772.
80% of the time, if Elliot Wave rule is broken, we immediately change count or reversal happens soon. In some cases an overlap is OK but must not exceed a very huge amount of margin.
Weeks ago, we posted that length of Primary Wave I(2009-2011) rally will be EQUAL to Primary Wave III(2011-2013) rally. If worst is to worst happens, we can clearly see that even TIME gives an enormous amount of data to us, and hints us on possible reversals.
SPX also broke below its 1794 short term uptrend line, and next uptrend line is at 1750 to 1752. Europe also has the same charts, and the impulsive selling could be tentatively indicated as Int Wave A, a possible Int Wave B rally could be happening this week before a final Int Wave C to happen to finish MAJOR WAVE A of Primary Wave IV correction. (80% chance to happen)
OR correction is done and we continue to rally to new highs till end of year (20% to happen)
SPX Weekly Charts also show that MACD and RSI levels are in the outmost part of where market peaks can be found.
We are also in the upper uptrend chancel of bull market since 2009.
We can climb up inch by inch, but who wants to buy and hold in upper resistance channels? :)
Good luck and hope to have a Santa Claus play by end of year :)
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