Are We There Yet?


With the market still not yet breaking down even below the initial trend channels outlined on my 5-minute chart, we have no clear indication from price action that wave iv is actually in progress.

However, I want to highlight again the extended nature of the daily MACD, which is at the nosebleed levels last seen when wave [3] topped of wave [i], back in June of 2020.  Moreover, the 60-mintue MACD has displayed negative divergences, and has turned down.   But, keep in mind that extended can get even more extended, and the 60-minute MACD can display yet another divergence on a higher high.

While the posture of the MACD would have me clearly expecting wave iv to have potentially begun already, I would like to see us break down out of the uptrend channel for a bit more confirmation.  

As far as a path for wave iv, the standard path suggests that the a-wave of iv targets the .236 retracement of wave iii, which is in the 4180SPX region, followed by a b-wave rally to the underside of the broken trend channel, followed by a c-wave down to the .382 retracement region and the top of our wave iv box.

So, we are left waiting for a more clear indication that wave iv is in progress, as this market has been incredibly strong to the upside and has been bought on every pullback.

60minSPX
60minSPX
SPXDaily
SPXDaily
5minSPX
5minSPX
Avi Gilburt is founder of ElliottWaveTrader.net.


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