S&P is hanging at the all time highs and we are entering into December, time of the year when all traders expect the market only to keep pushing higher. But charts tell me that bulls need a breather, at least a temporary pullback before a large rally can start.
OK, let’s get down to business. There are two main macro alternatives for S&P chart.
Most likely subwave (A) of wave ( 5 ) topped at 3,588.11 on Sep 2, 2020.
Then the main question is whether a large corrective subwave ( B ) down has bottomed.
We can see on the chart that the early September top was followed by a clean A-B-C structure. Even it was shallow we can count is as a completed subwave ( B ) down (bottomed at 3,233.94 on Oct 30, 2020 ).
Then this move up is the very first micro wave ( i ) (see the blue labels) of a large new rally in subwave ( C ) of wave ( 5 ) up targeting 5,000. Under that count SPX needs to come back down to 3,470 – 3,440 in wave ( ii ) down before a stronger rally in wave ( iii ) up starts.
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