By ElliottWave Forecast via Iris.xyz
S&P 500 formed a significant high at 2947 on Sept 21, 2018 after a 342% rally in 10 years. During the entire rally from the year 2009 low, there was no major correction in the Index — that is, until last year. In less than 3 months, the Index has dropped 21.4% from the peak. The Index bottomed at 2316.75 on December 26, 2018. It has now retraced more than 50% of the decline.
Is the bull market ready to resume higher? Not so fast. In the following chart, we will show how the Index can face a major resistance in coming days / weeks. The important key pivot remains last year’s high at 2947. As far as this level holds, the Index can still extend lower to break below Dec 26, 2018 low at 2316.75 or pullback in 3 waves at least.
S&P 500 E-Mini Futures ($ES_F) Long Term Technical Chart
The weekly chart on S&P 500 E-Mini Futures above shows 4 major corrections since the year 2000. In all cases, the initial leg of the decline was more than 10% and broke below an ascending bullish channel. After the initial break of the channel, we can see the Index rallied to retest the broken channel in year 2000, 2007, and 2015. Each time, the retest failed and the Index then reversed lower and broke the previous low of the initial decline.
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