Year-End Review of S&P500

The first scenario is 'as counted' and is the most optimistic as it implies a SuperCycle Wave [IV] yet to form that could be either primarily sideways, or make a new high, after a significant (62% - 78%) downward correction.

S&P500 - 1 Month Closes - As Counted

It assumes that SuperCycle [III] has already been made, as have the first Primary ((A)) wave down as shown above. This scenario has going for it that 1) all wave degrees have been accounted for and there are no degree violations that I can detect, and 2) while the PPO for the Primary ((B))-3 wave looks out-of-line with recent waves, it still currently diverges with the PPO from the year 2000 top. (Note: the PPO is often used in place of the MACD when log scale charts are used over a multi-year time frame.)

The second scenario is much more pessimistic.

S&P500 - 1 Month Closes - Alternate

This scenario assumes the whippy movements from 2018 to 2020 were part of an expanding triangle which should indicate 'last wave directly ahead'. Some difficulties with this scenario are that 1) Neely indicates he has never seen an expanding triangle in a fourth wave position, 2) there has been no five-wave movement down from the high yet to prove even a Primary wave, downward, let alone a Cycle wave downward, 3) there 'may not' be alternation in waves II and IV as they both have higher internal waves, although wave IV's triangle did not fail to make a lower low as wave II's wave did, 4) it is very hard to distinguish on this scale where the Primary waves would be within the Cycle waves up to SuperCycle V, and Fibonacci 5) there are degree-labeling problems both within the Cycle c wave down to SuperCycle [IV], and within the Cycle III wave up within SuperCycle [V].

In favor of the second count, this SuperCycle [V] up wave could have divergence with the PPO from the SuperCycle Wave [III] if it formally curls over. And there could be a throw-over of a Cycle degree trend channel.

Finally, a reminder that Monday is the first trading day of a new month and a new quarter which often, not always, sees inflows from pension funds, 401k's, company bonus plans, dividend reinvestment plans, etc.

Have an excellent rest of the weekend.

TraderJoe