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Thus, with an accuracy of around ±2%, we continue to reliably anticipate using the EWP where the index should top and bottom well ahead of time. Of course, we cannot know the exact path the market will take, as the daily price action is the least reliable. Still, foreseeing the most crucial top and bottom zones well ahead of time and before most is invaluable.
The Next Leg Higher Must Hold Above $6003
Therefore, our preferred view remains unchanged, as the market has not invalidated it. The index should now be in the grey W-iii of the green W-3/c, ideally to ~$6285, followed by the grey W-iv and W-v, at $6175 and ~$6365, respectively. At that latter level, the market can decide if the red W-v has topped or wants to tag on one last (green) W-4, 5 sequence. Besides, the index is A) above all our warning levels for the Bulls and B) above its rising 10-day simple moving average (d SMA), which is above the rising 20d SMA > 50d SMA > Ichimoku Cloud > 200d SMA. Thus, the chart shows a 100% bullish trend, so we must keep our bullish stance until proven otherwise.
What would that be? A break below the third (orange) warning level—the February 3 low at $6003, for starters, but ultimately, the January 13 low at $5773 remains the Bull-Bear line in the sand. Our preferred EW count is wrong if the market moves below these levels. But that’s our alternative, our insurance.
Thus, our Elliott Wave analysis provides specific levels to watch. How the market reacts to those combined with the structure of that reaction will tell us how to adjust if needed, aka “all we can do is anticipate, monitor, and adjust if necessary.” Currently, our preferred EW count remains on track. We’re simply monitoring its progress to see if it aligns with the market’s price action. If yes, stay long and keep monitoring. If not, adjust and take appropriate trading action.
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