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S&P 500 may be susceptible to a short term correction

S&P 500 Index (SPX) has made an epic long run from the March 2009 low of 667. According to my Elliott Wave count, SPX is now in the Cycle wave V of the SuperCycle wave (I) in the Grand SuperCycle wave I. We have very very long time for the development of the Cyle wave V that consists of the impulsive 5 wave string: (I) – (II) – (III) – (IV) – (V).

At Minor wave level, SPX is at the end of wave 5. So, after such a long run, we should see an A-B-C correction coming shortly. I expect wave V will finish around 2410. I don’t think now is the time to purchase.

During the coming price correction, a Zigzag (ZZ) wave pattern may develop and the first leg (wave A) is expected to move down to 2342. After a rally for wave B to test just a little above 2410, I suppose wave C of (4) will make the Index retreat to 2290 area. Note that any strong break below 2290 could accelerate the downside movement.

Technically, I expect SPX to have a consolidation within the next three weeks before a strong bullish move later.

Actually, sell stocks in May and go away is a right investment strategy in this case.

By Jack Huyn

Please be informed that information I provide is for educational purposes only and not intended as investment advice. Information and analysis above are derived from utilising methods believed to be reliable, but I cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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  1. On Monday 08 May 2017 and Tuesday,S&P 500 will test 2 400 points.That's a nice opportunity to order a short sell, then we will buy to cover it before S&P adjust to 2 350 points.This graphic is clear and convinced. Great !

    1. I expect a negative convergence between the price and the oscillator indicators that signals a temporary top for SPX and the Index will lead to a neccessary correction in short term. Many thanks to your commentary, Mr. ManhPhat Nguyen.


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