Looking at the bull market advance since 2009, we can see at least two options for counting. The options are that wave 3 ended in May'15 (blue) or wave 3 is ongoing (green).

The late 2015 decline certainly looks like a potential wave 4 except that the high earlier in May that year came with a negative divergence in RSI. Third waves usually have a strong RSI reading (like now).

If SPX is currently in wave v of 3 (green), then wave v is expected to be 100% or 161.8% of wave 1 (2009-10). As 100% has already been exceeded, 161.8% at 2,700 is the next target.

However, if SPX is in wave 5 from the 2009 low (blue), it is expected to be 61.8% of the 2009-20015 rally. That would target... (drum roll)... 2,700.

Try a "sneak-peek " this month at Seattle Technical Advisors.com

Ed Carlson, author of George Lindsay and the Art of Technical Analysis, and his new book, George Lindsay's An Aid to Timing is an independent trader, consultant, and Chartered Market Technician (CMT) based in Seattle. Carlson manages the website Seattle Technical Advisors.com, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.

© 2017 Copyright Ed Carlson - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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