We will continue to examine the SPX500 situation from Elliott theory’s point of view. The assumption is that there is a large impulse trend, marked by five subwaves of the cycle degrees I-II–III-IV–V.
The impulse pattern may have been completed in its three components. There is also a possibility that cycle correction wave IV has ended. It looks like a triple zigzag of the primary degree Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ.
The price could rise to 4326.34 by the end of the fifth cycle wave V. This impulse will take the form a primary degree impulse as shown on this chart.
Let’s also consider an alternative scenario in which the actionary wave Ⓩ will strive for equality with the wave Ⓨ.
Market participants could expect a decline in SPX500 to 3322.12. At that level, sub-waves Ⓩ and Ⓨ will be equal. Only when the price reaches that level will it turn around and begin an uptrend. A bearish impulse wave (C) of the intermediate degree is required to complete the wave Ⓩ.
The chart shows trend lines, which indicate possible future movement.
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