The stock market is setting up for another rally, according to Elliott Wave theory
As long as the S&P 500 holds 2,640 points, the index could rise to over 2,800
With the market bottoming at 2,603 in what we have primarily counted as an a-wave of wave 4, I expect that the market can rally back over the 2,800 level in the coming weeks. But I also think that we will have a b-wave pullback complete in the coming week before that next rally begins. Our target for this pullback is quite large, as it resides between 2,640 and 2,685, but as the c-wave drop takes hold, we will be able to pinpoint the ideal target for this pullback in much more narrow terms.
But it means that as long as the 2,640 region holds as support, I am looking for a rally over 2,800 on the SPX in the coming weeks. So for those who stopped out of their long positions on the break of 2,880, the market will give you an opportunity to re-enter on this pullback.
But the big question is still whether the market can push as high as the 3,011-3,050 region before we begin to drop down to 2200, or if we will likely top out below 2,910 before we begin that drop. As it stands now, I am leaning toward not being able to move through that 2,910 region.