Yesterday both the preferred count and alternate counts anticipated a rally, which the market provided. It ended up closing dead center in the target zone for the alternate count, which kept it from being eliminated. The preferred count continues to anticipate some further upside, but both counts remain plausible.
Since there’s not much to add to the S&P 500 forecast of the past few weeks, I’ve decided to include a few quick snapshots of some other markets. First, a quick update on the SPX charts. The preferred count (below) continues to anticipate marginally higher prices, followed by a reversal from the wave 5 target zone. My current expectation is for at least a 4-7% correction to ensue from this zone, but until the up-trend actually breaks, I wouldn’t advise front-running this particular rally — unless you’re a nimble trader.
Next, a close up of the alternate count, which hit the target zone dead-on. Trade above the 1367 highs would take this count off the table.
Moving on, below is a chart for silver. I’ve only published one article about silver in the past year: back on November 21 — when silver was above 30 — I predicted silver would move down to 25-27 to complete Primary Wave 4, and then reverse higher. This is exactly what happened, which lends credence to this count. This count anticipates that silver is now in its fifth wave up at Primary degree, and will eventually go on to new all-time highs.
Silver appears to be in the process of completing a perfect five-wave impulse move off the lows (blue wave 1), which suggests it’s due for a correction soon, as illustrated by the blue “2”. Further, it’s approaching two resistance lines.
Gold may be in a similar position, though I find gold’s wave count difficult to pin down at the moment. I would be more inclined to trade the trendlines on gold right now. Gold chart below.
Oil shows a much different pattern over the very long term, and its advance since 2009 does not appear nearly as constructive as either gold or silver. It does, however, present a similar inverted head and shoulders pattern for the intermediate term.
However, oil is massively overbought — and as the RSI highlights show, similar RSI levels in the past have often preceded sizable corrections in oil.
These three commodity markets bring us, inevitably, to the dollar. The dollar has been toying around with a key breakout level for over a month, and my expectation is that it’s likely to be forming a base here. Based on the Elliott Wave patterns, I believe the next meaningful move in the dollar will be up into the 85-87 zone. This would seem to be consistent with the idea that oil and silver are due for corrections (gold’s chart is more ambiguous).
Now, these expectations are based on Elliott Wave analysis. The fact is, oil and gold have both broken out to the upside (silver has not), and the dollar is below an important support level — so my expectations are running in direct opposition to the traditional technical patterns in these markets. Despite my Elliott Wave expectations, these levels and patterns which contradict it should not be ignored. It would be wise to wait and see how the market responds to these levels — for example, going long the dollar while it’s still beneath a key support level is front-running.
In other words, a little patience may be in order. The dollar closed right between two nice trade triggers, so one could play it either way, depending on how it breaks. Dollar chart below.
The last chart is a short-term Nasdaq 100 (NDX) chart. The NDX is forming a very clean ascending triangle pattern. Ascending triangles are usually bullish, though not always. A break out would suggest 50 points in the direction of the break.
In conclusion, there appear to be many good trade opportunities across various markets right now. Regarding the SPX: we’ve been anticipating it would trade up into this zone since February 8, and as I’ve mentioned before, this is an excellent zone for a reversal. However, this has been a very resilient trend, and most technicians will agree that this market has not been behaving in its “usual” way… so it’s advisable not to get too anxious to buck this particular trend. If this zone doesn’t slow it down, it’s likely headed into the 1400’s next. Trade safe.