We spent the better part of the last year or so discussing short term and long term EW pivots points. These price pivot levels have nothing to do with fibonacci relationships. They are levels created by bull markets as they rise, and bear markets as they decline. And they work quite well! But let’s not forget Leonardo Filius Bonacci, when examining the SPX. The italian mathematician we nicknamed Fibonacci who developed the Filius Bonacci sequence.
The other day we did a Fibonacci analysis on the DOW. Using the same cluster technique we will now examine the SPX. The current wave structure of both the DOW and the SPX suggests the market is rising in Intermediate wave five, of Major wave three, of Primary wave five. Since Primary waves 1 through 4 have been completed a potential bull market top can be calculated. Let’s save that for another day. The main concern at this stage of the bull market is the potential top for Intermediate wave 5, and therefore Major wave 3 since Intermediate 5 ends Major 3. Here are the calculated levels:
At SPX 1528: Intermediate waves 3 through 5 = 1.618 Intermediate wave 1.
At SPX 1555: Intermediate wave 5 = Intermediate wave 1.
At SPX 1576: Major wave 3 = 2.618 Major wave 1.
Amazingly, the long term EW pivot points are right at two of these Fibonacci levels. Our target for this uptrend is SPX 1530, the first Fibonacci relationship is 1528. If the market exceeds this level during this uptrend then SPX 1553, the all time high, fits right in with the second Fibonacci relationship at 1555. SPX 1576 we’ll leave for another day. There you have it, both Fibonacci and Elliott are pinpointing these two levels. Naturally, OEW lets the market unfold as it may, and tracks its progress as it does. Therefore, SPX 1530 is our upside target for this uptrend, until when and if, the market’s wave structure proves otherwise. Best to your trading!