Hello traders and investors. I am Radi Valov, a professional trader and today I will share with you you a quick update of my Elliott Wave analysis of US indices. Those of you who have read my previous Elliott Wave analysis know that since the evening of February 24 I have released an update for an important bottom in S&P 500 and Dow Jones industrial average.
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S&P500-Daily Chart
Despite the negative events in the recent weeks and even more negative sentiment in the market, last week of all US indices only Nasdaq made a new bottom. This divergence is usually observed towards the end of movements and is a great indicator.
S&P500-H4 Chart
After the bottom on February 24, I consider the rise in the S&P 500 and the Dow Jones as the leading diagonal for wave 1 (with red in the graph) and the deep retest of the bottom in both indices as wave 2. I must note that market sentiment during wave 2 was more negative than when it reached the bottom, which is a great confirmation of the bullish scenario and a very common phenomenon observed in the second waves.
We are currently developing at the beginning of wave 3 and I expect the upward movement to continue this week without significant adjustment to the area around 3550-3580 for S&P 500 and 35500-35800 for the Dow Jones.
In the medium term, according to my preferential Elliott Wave analysis, the S&P 500 / Dow Jones industrial average will move in the upward price channel on a daily chart and in the second half of the year, we will have new historical highs. The potential target for wave 5 is the area around 4970-5200 for S&P 500 and 37700-39000 for Dow Jones.
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