For you occasional "wavers-counters," I was asked by a colleague of mine to provide my "count" if I chose to view the 13-month advance through a wave analysis lens.

Bottom Line: The upleg off of the Nov 4, 2016 post-election low at 2083.79 represents the 3rd of the 3rd from the Feb 11, 2016 low at 1810.10.

If 3 of (3) travels a Fibonacci 1.618 x 1 of (3), then the target for the high price of 3 of (3) is 2410. Yesterday's high in the SPX was 2400.98, which means that for all intents and purposes, 3 of (3) has met its target and is complete.

What does this mean? If the Trump, post-election upleg is complete, then the SPX is vulnerable to some magnitude of correction, either in the form of a high-level digestion period or a period of weakness prior to a resumption of the dominant uptrend for Wave 5 of (3), which projects to a target of 2478.

Should weakness develop, then the optimal corrective support plateau is in the vicinity of the sharply rising 20 Day MA, now at 2338. If for argument sake, SPX corrected into the 2350/30 area during the upcoming days, we should manage our initial expectations for a press of 2.0% to 3.3% from the March 1, 2017 high at 2400.98.

Have a great trading week!

By Mike Paulenoff

Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!

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