Charts on S&P 500: Key Moment Early In The Coming Week

As the market continued higher this past week to our target of 2920SPX, we have seen the market adhere to our Fibonacci Pinball levels almost perfectly through the entire week’s action.  And, as long as all the levels through the Fibonacci Pinball level progression are respected, we should be heading to the 3000 region in September.

As I said last weekend:

For now, my expectation remains that we will continue marching higher towards the 2920SPX region next.  And, as we continue to march higher, we will use our Fibonacci Pinball method to move our support levels higher as well.

This past week, we came within 3 points of our ideal target.  And, when we struck that region on Wednesday, I issued an alert that noted we will likely “take a rest” and come back and test the 2893SPX support.  This is what the market did for Thursday and Friday, and, as of the close on Friday, we have basically held our support region.

That is why Tuesday’s follow through is so important.  As long as we hold 2892SPX, we have retained the immediate set up pointing to the 2950 region next, which is outlined on the attached 5-minute chart.  That would complete wave 5 of (3).

However, as I also noted on Friday, the SPX has come up to the maximum point at which we can see a larger (1)(2) still within wave iii of (iii) (the .764 extension of waves i and ii).  And, as you can see on the 60-minute chart, we have struck the upper end of the larger degree market pivot.  In order to keep pressure up on the larger time frame, we will need to move through this pivot, and up towards the 1.00 extension in the 2955SPX region.  This will likely set up a re-test of this pivot from above in a wave (4), which, if successful, will point us up towards the 3000 region later in September.   But, if we are unable to hold our current support, then I will likely have to view this as a wave (1) of iii of (iii) top, which would suggest next week will be a retrace week rather than a break out week.

So, Tuesday will probably tell us how the rest of the week is going to play out.  Should we see a gap up on Tuesday, then we are likely on our way to complete wave 5 of (3) (on the 5-minute chart) in the 2950SPX region, and ultimately up towards the 3000 later in September.  However, if we break down below 2892SPX on Tuesday, then it opens us up for a larger (1)(2) structure, as presented in yellow on the 60-minute chart.

This leaves me concluding my write up as I will likely continue to do so for the coming weeks.  As we continue moving higher, I want to remind you that we are setting up for a 20-30% correction, which can potentially take the SPX back down to the 2100SPX region within the next year or two (with a minimum expectation of the 2400-2500 region).  So, please keep in mind that risks continue to rise the closer we get to our upside targets.  And, should a support break before we get there, it would make me even more cautious.

5min-zoomSPX
5min-zoomSPX
60minSPX
60minSPX
1SPXdaily
1SPXdaily
LONGTERMSPX
LONGTERMSPX
Avi Gilburt is founder of ElliottWaveTrader.net.