S&P500 ~ today's all-time-high coincided with a Fibonacci price target that turned the market down to start a short term small price correction!


Last week we published charts showing our opinion of the current market structure and how the Elliott wave formation is developing. We were looking for some small degree ups and downs (4's and 5's) to complete the "minuette" wave-(iii) or "minute" wave [iii] top where we should see a small corrective move down.

Since then the market has moved up in a diagonal looking pattern, although void of any over-laps, at today's high reaching the common price target where wave-(iii) is a Fib 1.618% of wave-(i). We can also see that wave-(iii) has five sub-waves i-ii-iii-iv-v.

The cash market came around 10 points short of hitting the same Fib target as the futures market. This divergence could also help the correction start.

Price has turned down on the day in the largest correction since wave-v of (iii) began which should indicate that the wave-(iv) correction has begun. How deep it goes is anyone's guess because of the way the market has been acting for the past months.

The 30 minute chart shows the common Fib targets for the wave-(iv) correction which we'll be watching in anticipation of another rally for wave-(v) to complete the larger "minute" wave-[iii].

After that we should see a "minute" wave-[iv] followed by wave-[v] to new highs again to complete the larger "minor" wave-5 top.

In our opinion this top will also complete the larger wave-(5) of [5] of cycle wave-V. We'll discuss this in more detail as we watch how the market sub-divides to reach the final targets.



 Follow the Trend
and
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