S&P 500 EOD Review 02 Feb 2012

The market still has one more move up to go. If we take a look at the details of the action from 30 Jan 2012, it looks like a 5 waves formation with waves 1-2-3 completed and wave 4 either completed or is in progress. Next would be wave 5 and that would very likely be the end of this whole move up before a correction to 1257 kicks in. The target for the wave 5 is 1338.

S&P 500 EOD Elliott Wave Chart 02 Feb 2012

As you have seen, counting the waves for this whole move up has been such a challenge. And there is so much of indecision and it is very difficult to predict the moves. This is typical of a corrective waves. A lot of choppiness, irregular counts and indecision.

But I think that an impulsive move would develop soon and that would give us the clues going forward.

S&P 500 Fibonacci Confluence

The next band is as at 1282 – 1296 to the bottom and 1338 – 1363 to the top.

S&P 500 Daily Fibonacci Chart 02 Feb 2012

S&P 500 Volume and MACD

The Volume is still light. Note that the MACD on the hourly as well as the daily is still diverging to the downside which is very bearish.

S&P 500 Daily Volume Chart 02 Feb 2012

S&P 500 EOD Review 31 Jan 2012

The market is consolidating at this levels. The support region at 1300 seems to be holding for the time being. But the recovery from 1300 is not strong as can be seen in the price. The hourly MACD is below zero and is trying to turn up. It is very likely that the S&P 500 will head lower from here and a reasonable target for this correction would be the 200D MA line which is currently sitting at 1257.

Thereafter, I’m expecting the market to head higher and possible reach 1400 or even 1500. That would be the final leg of this whole correction.

S&P 500 EOD Elliott Wave Chart 31 Jan 2012

S&P 500 Fibonacci Confluence

The next band is at 1282-1296 region which is likely to provide some support but I’m still expecting the market to head lower to 1260 region.

S&P 500 Daily Fibonacci Chart 31 Jan 2012

S&P 500 Volume and MACD

The volume has finally increased slightly and it is a flat day. The tug of war between the bears and the bulls are showing. I think a lot of people who missed the last two rallies from 1078 (4 Oct 11) and then 1158 (25 Nov 11) are waiting to jump in when a correction kicks in. I think that is what’s happening. That is the reason why I believe there is one more leg up to go before the Primary B is over.

Daily MACD is turning down though. The final leg would likely progress above the current levels and even reach 1400 or 1500 with a clear divergence in the MACD.  That is when we can expect the Primary C which is expected to bring the S&P 500 to levels as low as 500 points.

S&P 500 Daily Volume Chart 31 Jan 2012

S&P 500 EOD Review 30 Jan 2012

The S&P 500 made a sharp move downwards to 1300 region and recovered to 1312. There is a few support lines at 1300 and it is not surprising to see the market bouncing off this level. A new development to note is that the hourly MACD has crossed into negative territory for the first time since 20 Dec 2012. Further downside is likely and the market is expected to correct to around 1260 as that is where the 200D MA is sitting at the current moment.

The market could also snap up from this support region and head higher still.

S&P 500 EOD Elliott Wave Chart 30 Jan 2012

S&P Fibonacci Confluence

The Fibonacci band at 1282 – 1296 is likely to provide support as the S&P 500 heads lower. If this band holds and the S&P 500 moves higher from there, we could see the market reaching for 1400 or even 1500.

S&P 500 Daily Fibonacci Chart 30 Jan 2012

S&P 500 Volume and MACD

The volume is still very light. The daily MACD is turning down and there is also divergence with the top made on 28 Oct 2011.

S&P 500 Daily Volume Chart 30 Jan 2012