The S&P 500 has corrected very well recently; In fact, for almost the entire month of November we saw a pullback of about 5 to 6%, which is a very large number for the S&P 500, and what’s really important is that the market stalled around the 6500 area, which basically goes back to October 10 when we saw a massive sell-off on that Friday when Trump threatened to impose new tariffs on China. But then, as you can see, the market has recovered, so it looks like a very nice bounce from that area with impulsive characteristics, even beyond the diagonal resistance lines and trend line. This likely confirms that the bulls are ready to resume the rally in a potential fifth wave, which could be conducted by a new low-grade five-wave bull cycle. Ideally, the new trend will resume shortly after the current setback which could flatten out in wave 2, so be careful of the uptrend continuing to all-time highs and 7k, possibly still this month.
After last week’s Fed meeting, we can see that it is making an irregular flat correction in wave (2) that could find support at the 6800 area, so we should soon realize a bullish resumption within wave (3).
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