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Monday, October 17, 2016 12:19:06 PM
For those who follow Elliott Wave analysis:
How deep will this correction go?
* October 17, 2016
For months we have been expecting a drop in the market to provide us with the pullback that will launch the next phase of the bull market which began in 2009. Recently, the market has finally followed through with some downside action. The question now is how deep will it run?
As we have been outlining during this past week, the depth of this pullback will depend on the structure we see in the coming week. Over the last few weeks, we have been tracking an ending diagonal c-wave to this wave (ii), as you can see on the 60-minute chart linked below. In order to maintain this as our primary perspective, the market should not break below the 2119 level on the S&P SPX, -0.13% and complete a 4th wave back up toward the 2060SPX region. If this is the type of action we see over the coming week, then this pullback will not likely break below the 2088-2104SPX region, and can complete sometime toward the end of October.
However, if the market breaks 2119 in the coming week, it can open the door to a drop down to the lower end of our target region in the 2035SPX region. If we do see such a break down, much will depend on the structure within which we break down, and will determine the depth of the drop. Remember that corrective action is the most variable of Elliott Wave structures, so we have to remain on our toes until the market completes this corrective action.
While there is some potential that the market has already completed wave (ii), I do not see this as a high probability at this time. Rather, the market will have to break out over 2170SPX for me to take this consideration more seriously.
So, as history has suggested that October often sees corrections as well as market bottoms, 2016 may present us with both. But based upon our larger-degree patterns, once this correction does complete and we begin to rally through resistance over 2200, I believe we will be on our way to our next higher target region around 2350, which will likely be a way-point on our path to 2500.
http://www.marketwatch.com/story/how-deep-will-this-correction-go-2016-10-17
• DiscoverGold
Click on "In reply to", for Authors past commentaries
How deep will this correction go?
* October 17, 2016
For months we have been expecting a drop in the market to provide us with the pullback that will launch the next phase of the bull market which began in 2009. Recently, the market has finally followed through with some downside action. The question now is how deep will it run?
As we have been outlining during this past week, the depth of this pullback will depend on the structure we see in the coming week. Over the last few weeks, we have been tracking an ending diagonal c-wave to this wave (ii), as you can see on the 60-minute chart linked below. In order to maintain this as our primary perspective, the market should not break below the 2119 level on the S&P SPX, -0.13% and complete a 4th wave back up toward the 2060SPX region. If this is the type of action we see over the coming week, then this pullback will not likely break below the 2088-2104SPX region, and can complete sometime toward the end of October.
However, if the market breaks 2119 in the coming week, it can open the door to a drop down to the lower end of our target region in the 2035SPX region. If we do see such a break down, much will depend on the structure within which we break down, and will determine the depth of the drop. Remember that corrective action is the most variable of Elliott Wave structures, so we have to remain on our toes until the market completes this corrective action.
While there is some potential that the market has already completed wave (ii), I do not see this as a high probability at this time. Rather, the market will have to break out over 2170SPX for me to take this consideration more seriously.
So, as history has suggested that October often sees corrections as well as market bottoms, 2016 may present us with both. But based upon our larger-degree patterns, once this correction does complete and we begin to rally through resistance over 2200, I believe we will be on our way to our next higher target region around 2350, which will likely be a way-point on our path to 2500.
http://www.marketwatch.com/story/how-deep-will-this-correction-go-2016-10-17
• DiscoverGold
Click on "In reply to", for Authors past commentaries
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
• DiscoverGold
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