As the market continues to whipsaw market participants, it has certainly left many of you scratching your head.
As each day goes by, it offers me another opportunity to chuckle when I see so many attempts by pundits to try to explain what latest news events cause each whipsaw. And when they try to fit their square pegs into round holes, or, when they don’t have any pegs at all when there is no news to even attempt to explain a move, it just makes me wonder when these market participants will finally open their eyes as to how the market really works.
In fact, this past week, I penned a blog post to at least urge market participants to consider adding another tool to their tool box beyond fundamental analysis or news following:
Whereas those attempting to follow the news have been terribly whipsawed, those that have used Elliott Wave analysis have had forewarning as to where these turns would occur.
For those that understand Elliott Wave analysis, and as I have explained before, the 4th wave within the 5-wave Elliott structure provide the most whipsaw as it is the most variable wave within the 5-wave structure. Understanding the market through this context can prepare you to expect this type of whipsaw, and a deeper understanding of Fibonacci Pinball allows you to have forewarning as to where these turns can occur.
So, in true 4th wave action, I noted last week that if the 2640SPX level were to break as immediate support, it would point us to the next lower support, which was around the 2616SPX region. The market bottomed at 2613SPX, and began a 65 point rally off that level.
In the coming week, as long as we do not break below last week’s low, we have a set up to rally back towards the 2737-2776SPX region.
Alternatively, should we break below last week’s low, then it opens the door to complete this 4th wave correction in the 2450-2495SPX region later in May. And, it will most likely continue in whipsaw fashion, as it would likely take the shape of an ending diagonal.
It seems that Seeking Alpha has changed the way they tag articles. So, while my articles used to be sent out as an email to those that follow the metals complex, they are now only being sent out to those that have chosen to “Follow” me. So, if you would like notification as to when my articles are published, please hit the button at the top to “Follow” me.
THE MARKET PINBALL WIZARD
The Market Pinball Wizard attempts to identify turning points and targets in the market with high levels of probability. Our goal is to teach you to fish so you can become a better trader and investor, and ultimately, learn to master the markets on your own.
A subscription includes video tutorials and articles about risk management, Elliott Wave analysis, and Fibonacci Pinball, as well as regular updates on the S&P500, metals and GDX, USO, and the DXY.
As the metals market develops its bottoming, and the equities market sets up for its run to 3000+, come join us at The Market Pinball Wizard for a free trial while we track these markets to their long-term targets.
“Just joined and this is by far the most efficient and accurate technical analysis I have seen in a while. Well done.”
“I have been investing in the markets from 1981. I have never come across anyone who can predict the turning points in the markets with such uncanny accuracy. I am amazed at the way you stand our from the rest of the crowd with your analysis especially on metals and SPX.”
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.