The S&P 500 index is currently trading near 2044, after climbing as high as 2051 earlier today. It looks like the index is set for another good week, despite the short-term pull-back to 2004 at the start. There has been a lot of news during the last five days, including retails sales reports, building permits reports, core CPI reports and, of course, the Federal Reserve’s policy statement. Most traders have been following each of these events, in order to predict how the markets were going to react to them. However, we did not need to, because we rely on the Elliott Wave Principle. The chart below was sent to our premium clients on Monday, March 14th. It demonstrates how one can make accurate market forecasts by using nothing more than a price chart.(some of the marks have been removed for this article)
There are three basic types of corrective patterns in the Elliott Wave catalogue. Five days ago,we managed to recognize one of them – the expanding flat correction – on the 15-minute chart of the S&P 500, shown above. Three waves down for a), three waves to a new swing high for b), followed by a sharp impulse for wave c) down to 1968. The theory says that once a correction is over, the larger trend resumes. The S&P 500 has been identified to be in an uptrend. That allowed us to tell our clients that “a short-term pull-back to the recently broken resistance near 2010 would be an excellent buying opportunity” and that “the last bottom at 1968 should be safe from now on”. The next chart shows how things went.
As visible, the anticipated short-term pull-back began almost immediately. It took the S&P 500 back down to the above-mentioned support area, where the bulls decided they have had enough and took the wheel again. This forecast proves that news is not as nearly as important as most people believe it is, but also that Elliott Wave analysis can definitely improve your trading. And that is every trader’s goal, right?
What to expect from now on? What is the bigger picture saying? Is the S&P 500 going to continue even higher or the resistance near 2050 would turn out to be too strong for the bulls to breach? Prepare yourself for whatever is coming. Order your on demand Elliott Wave analysis now or pre-order the one due out next Monday at our Premium Forecasts section. Stay ahead of the news in any market with the Elliott Wave principle.
