By Avi Gilburt, ElliottWaveTrader.net
The S&P500 gapped up on Monday to the resistance region we noted last week between 2507-2510SPX. And, after testing it many, many times, it still has not been able to overcome that resistance the entire week.
Not much has stopped this market’s upward trajectory over the last year and a half. In fact, even the pullbacks have been much more shallow than standard pullbacks.
As I noted last week, even some of the worst weather events hitting the United States in many decades and the threat of nuclear war has not diverted the stock market from its strong rally.
But, this weekend, we are being warned about a worldwide event which could wreak havoc upon the entire human race. David Meade, the author of “Planet X: The 2017 Arrival,” has predicted that Sept. 23 will bring “a magnificent sign in the skies over Jerusalem, a historical event signaling an upcoming ‘Tribulation Period’ of seven years.”
He also asserted that a “Planet X” will cause the “greatest catastrophic infliction of life upon mankind, since Noah’s Ark,” – citing the biblical story of a great flood that wiped out much of the Earth and humanity. The Planet X will cause volcanic eruptions, a short stoppage of the Earth’s rotation, change in climate, tidal waves and earthquakes.
It seems that Mr. Mead is expecting the Apocalypse to occur just around the corner.
Now, as I have said many times before, exogenous events will not cause a change in the longer-term direction of the market. Moreover, I have cited many studies which prove this point based upon historical analysis of surprise news events and market reactions.
So, while this apocalyptic event may trigger the market to sell off (which we have been expecting of late), as long as we remain over the 2300SPX region support, the long-term rally will remain intact, and I will still expect us to next head up to the 2600SPX region.
Ultimately, my point is that this market is heading to the 2600SPX region, and any sell-offs seen due to the apocalypse will be a “buy-the-dip” opportunity for the rally up to the 2600SPX region.
Price pattern sentiment indications and upcoming expectations
I believe the coming week will cause the market to finally make a decision. If the 2507/10SPX region continues to hold as resistance, and we turn down to break 2480SPX, I believe we will drop to retest the 2400SPX region again. And, this is my preference at this point in time.
However, if we are unable to turn down at 2507/10SPX, or if we are unable to strongly break below 2480SPX, then the market is sending us a message that it wants to head to at least the 2545SPX region, and potentially even up towards the 2600SPX region before wave (3) completes.
Should we see a strong break out through 2511, with follow through over 2520SPX, support is moved up to the 2498SPX region. I am going to expect that this support region will be tested should a break out be seen, and if it holds, it sets us up to head up towards the 2550SPX region in the coming weeks.
See charts illustrating the wave counts on the S&P 500.
Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.elliottwavetrader.net), a live Trading Room featuring his intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.