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February 28th, 2020: SP-500 Monthly Chart Update

Posted by pugsma on February 28, 2020

11:45 am EST:  Here is something that I’ve been contemplating showing since late December 2019.  I have mentioned it several times in the comments section since December.

If we look at the SP500 monthly chart since the March 2009 low at 667, the price action has been in a clear bull channel.  This bull channel is a Super Cycle V (SC-V) wave that should last 20 to 25 years (a generation).  Note that the lower bound of the bull channel has been the 50-month SMA (light blue line) since October 2011 low at 1075.

Right now the 50-month SMA is sitting at 2581, which is well above the Dec 2018 low at 2347.  I believe that there is high probability that this 2347 low will hold during this market correction and that the Dec 2018 low of 2347 was end of Cycle 2 (C2) of Super Cycle V (SC-V).

This means that the primary (green) wave count is that the move up from 2347 to 3394 was Primary 1 (P1) of Cycle 3 (C3) of Super Cycle V (SC-V).   This correction down from 3394 to 2856 (so far) is Primary 2 (P2) of Cycle 3 (C3) of SC-V.    The typical 50%to 62% Fibonacci retracement for the P2 wave are at 2871 and 2745.   As long as the P2 wave holds the C2 low at 2347, this primary (green) wave count remains valid.  Once the P2 wave ends, the next move is a massive move higher in P3-C3, which will take the SP-500 well above 4000.

As an alternate (red) wave count I have the Cycle (C1) of Super Cycle V (SC-V) top at 3394 and this move lower is a Cycle (C2) wave.  A typical C2 wave would retrace at least 50% to 62% to the 2031 to 1703 area.   A break below 2347 would confirm this alternate (red) wave count.

SP-500 Monthly Chart:

SP500 Technical Analysis


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