SPX Symmetry Target

Equities have registered a new all-time high and as such, a revised count is warranted. Here I show a potential fifth wave extension, with wave (5) of 5 of V completing now, with symmetry targets met. Symmetry is but one tool technicians can utilize to anticipate tops. This could well mark the final top of the bull market. 

S&P500 Alternate Count and Deflationary Forecast

 The preponderance of the evidence certainly points to a final peak in equity prices. What follows should be the most severe deflationary stock market crash in U.S. History. The previous post outlined the mot likely count, that Cycle Wave V peaked February 2025 on the S&P500 stock index. While the market exceeded the price targets suggested by the ratios presented in that post, it only did so by less than 2.5%, a very brief overshoot of my price targets given the multi-decade bull market that is peaking now. 

Below I show an alternate count, that brings back the idea of the move from March 2009 being nothing but a large scale bear market rally, the position that was held on this blog since it's inception in 2009. However, given the scale of the rally, it would be reasonable to conclude this was Supercycle Wave (b). What would follow is Supercycle Wave (c) down that would complete the bear market. Supercycle Wave (c) would take the market well below the 2009 lows, and likely down to the 1974/1982 lows or lower.   

Supporting this count is the fact that the SPX Priced in real money, Gold, has been in a bear market since 2000, when stock market actually peaked. The rally since 2009 has been driven by Central Bank Liquidity and optimistic investors bidding up asset prices. Now that wave structure, and thus the trend in Social Mood, has shifted from up to down dramatically, nominal asset prices should reprice to reflect the Gold denominated price of equities, the true value of U.S. Corporations.     

Note that if this count is correct, wave (b) would equal a Fibonacci 6.18 times the length of wave (a). This is not a coincidence. It is the Golden Ratio, Nature's Mathematical Manifestation, at work.

SPX Long-Term Wave Symmetry

 The S&P 500 index is exhibiting potential wave Symmetry from the 1949 Supercycle (IV) low, between waves I and V of (V). A common Elliott Wave Guideline is that Wave V will travel an equal distance to Wave I. The market is potentially signaling the presence of this symmetrical dynamic in percentage terms. If a top were to occur today, 11/11/2024, it would imply a 2/3 duration of Wave V of (V) to Wave I of (V).

Also of note is the length of Wave V is equal to a Fibonacci 6.62 Multiple of Wave B of IV from October 2002-October 2007.

Final Bull Market Top

 It appears the Stock Market has completed the Grand Supercycle Bull Market. The prior bullish stance of this blog back in early 2022 proved correct as equity prices advanced to new all-time highs. The deflationary forces that have been building for decades should now take hold and result in the largest bear market in centuries. Ultimately, the March 2009 lows will be taken out, and likely the 1982 low. 

The Final Significant Correction of the Bull Market

It has been posited on this blog since early 2018 that the Bull Market would continue until 2022, simply utilizing the power of the Fibonacci Sequence in determining the likely duration. When equity prices continued past the 8-year mark, 13 was the next number of years in the sequence, and that year has arrived. I am not taking credit for this call yet, because 2022 has only just begun. With the extent and duration of stock market speculation, leverage, and historically high valuations, it would seem this should be it- the Grand Supercycle Bull Market, spanning more than two centuries, should top this year. It is now up to the market to prove this assertion correct. If this analysis really is correct and equities are beginning a multi-decade bear market, the bull market reversal and initial decline off the top should be unlike anything market observers have seen before. Records will be broken in downside breadth, gauges of fear and rate of change in the sheer swift nature of the initial bear market kickoff. In the meanwhile, the bull market is still ongoing and below I present an analysis of the current wave (4) correction.

Intermediate Wave (4) is now underway, in what is anticipated to be the final correction of significance in the Bull Market that began in March 2009. In Elliott Wave Analysis, there are a number of different structures corrections can take. Considering that wave (2) was a flat correction, wave (4) is likely to either be a triangle, zigzag or combination correction. A simple triangle appears to have been ruled out due to the new highs registered in January, and the subsequent decline below the December lows, ruling out a possible running triangle. It would appear the two most likely outcomes are another expanded flat, or a combination for wave (4). Given Elliott's guideline of alternation, and the fact that wave (2) was a flat, wave (4) should be a combination correction. Below is a double-three composed of a flat followed by a triangle. This would serve to frustrate the majority of market pundits as market direction will become unclear. When the correction is over, Wave (5), the final impulse wave of the Grand Supercycle Bull Market, would then commence and take equity values to new all-time highs.   

Elliott Outlined the tendency of impulse waves to form a channel connecting the ends of waves 1 and 3, running parallel to a line connecting the ends of waves 2 and 4. At the recent low on January 24, price briefly undercut the lower trendline, only to stage one of the biggest intraday upside reversals on record. The market clearly recognized this support zone. I would therefore be remiss if I ignored the possibility of the entire wave (4) correction completing at this low, or possibly a higher low in a truncated wave 5 of C of (4). Under this scenario, the market would test the lows, perhaps respecting the lower trendline before reversing upwards and impulsing straight to new highs in wave (5). 

Elliott Wave Bull Market Projection

 U.S. Equity prices have continued to remain strong, as the expected ongoing correction scenario posted in January did not materialize. The long term bull market, however, remains intact as expected into 2022.  Below is the favored Elliott Wave Count and projection for the remainder of the bull market. Although Intermediate Wave (2) was shallow, wave (4) is expected to be sharp to set the market up for the final top.

 

Long term price targets are derived from the previous bull markets of Cycle wave V of Supercycle Wave (III) and Cycle wave I of Supercycle Wave (V).

Crude Oil's Secular Bear Market

 Back in March 2020, amidst a crashing stock market and outright fear amongst speculators, the primary concern was deflationary pressures as the global economy went into recession. Oil prices went negative in April 2020, and many pundits were speculating oil would "never recover". While not published here, I was expecting a recovery in oil and that has now occurred. Now, all the talk is of inflation concerns. Just as occurred last spring the markets are once again poised to fool the greatest number, and reverse back into a deflationary trend. Below I present a long term Elliott Wave Picture in Crude Oil Prices. From the July 2008 Bull Market top, oil declined over 95% to a low in April 2020, and staged a throw-over of the lower trendline connecting the 2008 and 2016 lows. From that low oil has staged an impressive rally back to the 2018 wave (4) highs, as well as the 50% price retracement from the 2008-2020 decline, a common stopping point for price in Elliott Wave Analysis. Also of note is it has been a Fibonacci 13 years since the 2008 peak. It is fitting that the timing of the cycle wave V high and the cycle wave b high are separated by a Fibonacci number of years. 

Given my longer term deflationary thesis in equities and global markets, I do not see oil beginning a new secular bull market. It now appears oil has completed its bear market rally from the 2020 lows, and is apt to continue it's secular bear market. The above notwithstanding, oil could hold up relatively well until the anticipated peak in equities in 2022. Updates will be posted periodically.