But, as we had indicated, if the S&P500 made a new high then it would break the C = 0.618 x A potential Fibonacci relationship in that index, and that relationship is now broken. So, that leaves the next most likely relationship as a potential C = A relationship. And, if that is to happen this next chart seems particularly relevant.
|Possible Measured Move in the Weekly Russell 2000 Index|
Secondly, there is that large gap on the weekly chart, and such a gap could fill, and a C = A move, sometimes known as a "measured move" could fill that gap. If so, this could place all indexes in the position of being able to make either an Ending Contracting Diagonal or a continued impulse higher.
Again, while we see higher highs are possible, we are 'not' particularly bullish at this time. This market is only about 5% away from new all-time highs, and, if that is a possible 'reward', then there is also certainly a lot of risk. Some sentiment indicators as you likely know are now nearing somewhat more extreme levels.
Volatility Index ($VIX) = 11.39, a new yearly low, and vs. a 2014 low of 10.32
Put-Call Ratio ($CPCE) = 0.52, in the very speculative range, and vs. a 2014 low of 0.38
And, while trading or investment advice is not intended or given, keeping some 'powder dry' seems like a smart thing to us at this point in time.