Those who have followed us for at least six months know how well we have identified important turning points in the US stock market.
When the S & P 500 Index
SPX, + 0.07%
broke below 2880 points in the fall, I noted that I believed the risk of inconvenience outweighs any further potential. And as we now know, this breakdown opened the door to correction to the 2,345 level.
When S & P 500 fell below 2800, we set a bottom target between 2,250 and 2,335 for what I saw as the first phase of this larger gradient correction. That's what we've labeled as our a-wave on our 60-minute and daily S&P 500 charts.
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As we also know, the market has bottomed out within our target area (in the future), but did not give us a clear foothold structure in that bottom region. But even before we punched, I was highlighted my expectations for the "corrective" rally I expected once that the a-wave was completed.
And for those who followed us closely, you would remember that my minimum target for this 2.350-region rally was 2,800, with the potential to even rally as high as the 3,01
Elliott Wave Analysis shares this corrective rally I've been expecting (which is labeled as a b wave) with a substructure on [a] – [b] – [c]. While I had set my goal for the [a] wave on our map, even before we stacked, the market ranked 50 points higher than my ideal target region for this first low rally. But as I also mentioned during the collection, the higher this wave takes us, the higher we will probably collect in our upper target area for the b-wave.
At this point, it appears that the market has peaked in the wave, and we are now in the wave of the [b] wave draft. And I generally expect that the wave will divide as I have outlined on the attached five-minute chart.
The question that we are going to seize in the coming months is how high this b-wave rally will travel. The answer will depend on two things. First, we must confirm where the bottom of the retraction of the waves will be formed. My minimum goal for that is in the 2,600 region at this time, with the potential to fall as deep as the 2500 region, which you can see based on my target box on the 60-minute chart. And since the b-wave target often shows a ratio of [a] = [c] in its substructure, a wave bottom is within 2,500-2,600 points to a target in the 2,900-3,000 region.
Since [c] the wave consists of a standard waveform Elliott Wave structure, and they tend to target the 2.00 extension of waves 1 and 2 in the diagonal structure, we will be looking for a goal that brings context between the expansions of waves one and two in the wave, and the relationship between the waves [a] and [c]. So, if the goal [a] = [c] coincides with the 2.00 extension of waves one and two of [c]we have a high probability target for a peak to the market in the coming months. But right now it's too early to make such provisions since we haven't yet completed the [b] wave yet.
As long as the S & P 500 remains below the 2,725 region, I look for further disadvantages in the coming week as we form more of the [b] wave feedback structure. Alternatively, if the market is able to gather impulsively through this week's peak, it opens the door to the potential that the wave is already finished, and we are already in the wave race, pointing us directly to the 2,940 region. This I have labeled as the "FOMO count" is presented in purple.
As I have marked many times before we even began this correction, my ideal goal for this fourth wave correction is to a greater extent in the 2,100-2,200 region. Furthermore, I also believe that we will still see a multi-year rally that points us to at least the 3200 region, with the potential for a kind of peak to as high as 4,100 region, and takes us into the estimated time frame 2022/23. We will not be able to identify the highest likelihood target for the last rally stage before the waves one and two of the last rally are completed. We can then project our goals to limit the high probability of peak targets for the beef market, which started in 2009.
At the end of the day, and based on our general expectations, it seems that we are in the seventh  See more charts that illustrate Avis wave numbers on S & P 500 across different time frames.
Avi Gilburt is a senior Elliott Wave technical analyst and founder of ElliottWaveTrader.net, a live Trading Room with its intraday market analysis (including emini S & P 500, metals, oil, USD and VXX) analyst forum, and detailed library of Elliott Wave education.