While I do believe the market will hit new all-time highs, and well exceed the prior highs, my only question is going to be whether we see all-time highs before we see a bigger correction.
In the analysis I provided well over a week ago, I noted that the 2910/15SPX region is of importance regarding whether the market can head to 3010-3040 before a bigger drop, or if we can top out within that resistance region and turn down hard.
Now that the market has struck the next resistance region, we are able to move our support up to the 2865/85SPX region. And, as long as all pullbacks now are corrective and hold over the 2865-85 support region noted on our 5-minute chart, the market has opened the door to head to our old targets between 3011-40SPX. Moreover, I am still counting a move that high as within the b-wave structure of the larger degree wave 4. In fact, the Bayesian probabilities that this is a b-wave are actually rising.
However, if the market is able to turn down next week and break below 2860SPX, it suggests that the 3011-40SPX region will not likely be seen until after we see the c-wave down in the market.
As we were expecting the bottoming in the SPX within the 2250-2335SPX region many months ago, I warned that this rally will have to take us high enough that most of the market will be certain that the correction is over and that we are on our way to 3500+. For this reason, I said that we would likely have to exceed the 2800SPX region, and may even reach our prior targets in the 3011-40SPX region. And, if you look around, you will now see how many scoff at the potential for any major selling to return. In fact, most are simply going to be happy with “some” pullback.
But, I think the market has done exactly what it needed to do to shake out any further bearish expectations. And, the market will soon tell us if that still needs to push us up towards the 3011-40SPX region or not. But, based upon the larger degree structures, as well as all the other reasons I have highlighted so many times before, I still think we will see a larger decline later this year, especially after most have given up on any bearish potential.
Yet, my longer-term expectations remain the same. I still don’t think that the true bull market move will begin in earnest until 2020, and it will likely point us up over the 3500SPX region as we approach 2022.