Two days ago I already showed that the technicals pointed towards higher highs. That was correct, the FOMC minutes did nothing, and clearly there is more upside to be had. So what’s next!? IMHO SPX 2040 is next. Why? Well, first, for this analyzes I had to redo my entire charts based on the alternate count I presented almost a month ago and that count has now with the current price action become my preferred count.
- please see chart below and compare the august set up with the current set up. “you are here” simple means more upside. (click to chart enlarge)
2. the 1.382x extension of blue primary I, 666 to 1370, measured from Primary II, 1075, is at 2048
3.the 4.000x extension of yellow major , 1075 to 1293, measured from Major , 1159, is at 2031
4. the 3.000x extension of red intermediate (i), 1159 to 1422 from (ii), 1267, is at 2056.
Note how price hit the 1.618x extension of (i) for (iii) almost perfectly (1689 vs 1693).
Hence, there is nice Fib confluence and resistance in the 2040 zone, +/- 10 points.
Fourth, the 80/20 rule suggests that the recent trade THROUGH 1980 will lead to the next higher 20s, in this case 2020. From there it’s a easy shot to 2040.
Fifth, this relentless up wave, without any significant pullback has all the hallmarks of a barely subdividing 5th wave/blow off top.
Last but not least, please recall the essay I posted 2 months ago where I suggested that 2040ish would be the preferred target for P-III. However, the path I presented for it was wrong, but I do think we’ll get there!
With all this in mind I think 2040 is a very good target.