Not Much Has Changed

Since the bottom we were looking for at the start of November, the market has rallied 200 points in an almost straight line up.  And, for the last week and a half, we have been in a sideways grind.  But, there is nothing bearish about a sideways grind, especially after a 200 point rally.  Rather, we are counting this as a 4th wave, before we head over 2300 in a 5th wave. 

After today’s drop, we clearly now have enough waves in place for all of a running triangle 4th wave.  However, running triangles are quite rare, so I would like a little more evidence that the triangle has completed.  In fact, a standard triangle can still play out over the next several days in more sideways grinding if the market desires so. 

But, it still leaves us with the same perspective we have been discussing now for weeks.  As long as the market does not break upper support, we are on track to our targets over 2500 in 2017.  And, since it will not be a straight line up, we will likely have more weeks like this over the coming year.  But, the main trajectory is still up, again, as long as we continue to hold upper support.

1turnchart
1turnchart
Avi Gilburt is founder of ElliottWaveTrader.net.