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S&P 500 Elliott Wave Forecast

From Elliott Wave Global Market Service

Taking an objective look at the S&P500 it would appear likely that there are plenty of reasons why these markets might be close to completing major topping patterns right now. In our view, it is looking increasingly likely the S&P500 is again set for another significant swoon in prices at any time now in what is likely to be a very strong second down wave in a much larger downtrend move.

With the use of a combination of Elliott Wave Theory and technical analysis we can identify that the majority of technical evidence is indicating a range of larger bearish topping chart patterns forming now, patterns that are likely to lead to swift declines to much lower prices.

Interestingly, there are now forming a confluence of factors that are pointing to significant tops forming right now with a great deal of downside potential if these patterns play out as we expect - and in most cases declines look set exceed 60% of current price levels in most markets over the longer term. On short term analysis, a range of topping patterns appear to be close to completion now and are indicative of a 10-20% crash move developing at any tim.

Other than a host of technical indicators and bearish technical chart patterns, the most obvious indication of a major move lower is a near complete bearish Elliott Wave count, that if correct will usher a larger crash move in the near term

Rather than go through the individual detail, I have decided to attach to this article a special copy of an S&P500 Forecast Video from the 28th of June that details the prevailing technical evidence indicating lower prices directly ahead.

So, if you follow the markets and use either Elliott Wave or technical analysis for the basis of your trading and you would like to receive daily video reports covering the short term Elliott wave and technical analysis of the major US markets, Gold Trust, Oil Holders and USD Bullish then please visit our service at www.elliottwavegms.com. We also cover all major global markets, currencies and commodities in our monthly forecast report in addition to our portfolio stock service by way of weekly video update.

We are currently offering A WEEK OF FULL MEMBERSHIP FREE to all visitors who register only their first name and email address.  To get full immediate access to the full range of video forecast reports for click here GET ONE WEEK OF FULL MEMBERSHIP FOR FREE!

Paul Thomason

Founder, Elliott Wave Global Market Service

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Spread contracts have a variable payout that lets you take a short-term position on the direction of a market. These contracts are very easy to understand as they allow you to trade on where a price will go thereby limiting your exposure to volatility in the market.

These spread contrast are based on an underlying market and are settled based on that. The underlying markets are generally a Futures market such as grain or precious metals.

As an example, if you buy a Spread contract you are essentially buying a instrument that you are taking apposition ion will be worth more than the buying price at expiry. And when you sell a Spread Contract you are doing the inverse:  you have speculated that the instrument that you are selling will be lower at the time of settlement.

Floor and Ceiling

All Spreads contracts have top and bottoms called Floors and Ceiling associated with them. These represent the minimum and maximum levels at which the Nadex contract can be settled, no matter how far past either level the underlying market may have moved. The Floor and Ceiling values for each individual contract remain constant throughout the life of that contract. This is a tremendous advantage because at the outset the maximum gain and /or loss is already defined.

Contract Size
All Spread contracts are defined such that a 1-point (or 1-tick) movement means a $1 profit or loss per contract. So if you bought 3 contracts and sold them for a 25-point gain, your profit would be 3 x 25 x$1=$75. Likewise, if you bought 10 contracts which were settled at a 19-point loss, you would lose 10 x 19 x $1 = $190. This allows you to know that a one point movement is always s worth $1 per each contract you own

The definition of a ‘point’ can vary between different underlying markets. As an example, Wall Street 30 is quoted in full numbers, i.e. 11467,  while Crude Oil is priced in dollars and cents, i.e. $75.09.

Comparison with underlying market
For what is known as a Master Spread  contract a large range between the levels of Floor and Ceiling will generally be trading between these values. Therefore the price of the Master Spread contract is likely to be easily compared with the underlying market.

Narrow spreads on the other hand have a converse relationship, that is the levels of the floor and Ceiling may be narrow meaning that the underlying market might be trading near (or outside) of those levels. The net effect of this is that prices have a greater degree of optionality and are much tougher to draw comparison to the underlying market.

For more information about Spread Contracts and Forex Trading see IG Markets.

These products are not suitable for everyone, so please ensure that you fully understand the risks involved. These products are volatile instruments that involve a high risk of losing all of your investment.  Past performance is not always indicative of future results

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