SPX Elliott Waves (SP500)

[gdl]

Common sense VS EWave.

Merrill Lynch the very optimistic view on current earnings. instead of minus 2 percent sees it flat this quarter.

The projections for future earnings will be looked at thru a microscope this earning season. WHY? The assumption by everyone is that earnings will hit double digit before this year is out.

Bond market calling for a recession by then. lets assume the worse case. recession when earnings expected to be double digits. Can YOU guess the amount of adjustment needed in the market to get balanced? Currently in one of the longest recession proof period. market needs rate cuts to justify current market heights.

Trade wars will likely increase as trump goers after every single nation that is benefiting from his China Trade War.

=========================================================================
Now on the EW side there is a religious belief that EW has no need for fundamentals or longer term political policy. I proved this was completely wrong on the last two big reversals. in 2016 all EW Charts saw an ending of Wave 5. OUCH! me, i used common sense analysis. The start of Trade War with china everyone told me it didn't affect market movement but clearly in hindsight it was a perfect match. BUT the old adage stays, EW over external noise.

the CHARTS even if you don't follow EW looks great. We cleared the last hurdle easily and visually it looks like the path is set for a long prosperous incline up.
========================================================================

In conclusion I will stick with common sense despite the glaring discrepancies between the two.