With S&P 500 Bullish Wedge Target Of 4600+ Reached, What’s Next?

Over the past two weeks, I kept you abreast of the bullish wedge forming on the {{166|S&P 500}, which pointed toward SPX 4600+. See and .

Fast forward, and the index is already at SPX 4630s. Thus, if one used my objective, fact-based forecast and bought the breakout on March 16, one would already be up a nice +6% in the SPDR® S&P 500 (NYSE:).

So what’s next?

Figure 1. S&P 500 daily line charts with technical patterns and indicators:

S&P 500 Daily Chart.

In my last update I mentioned:

The 50- and 200-day Simple Moving Averages (SMAs) at SPX 4437 and SPX 4470, respectively, should provide some resistance, but based on my Elliott Wave Principle (EWP) work, I expect the stock markets to have put in a lasting bottom and that a subdividing five-wave rally to SPX5500-6000 is now under way.”

Last week the index gyrated around the 200-day SMA for several days, held the 50-day SMA as support, and took off last Thursday. Today’s move over initial resistance at SPX 4600 (the late January and early February spike highs) opens up a clear path to the next resistance zone at ~SPX 4700 (horizontal blue line), which equates to the October and November 2020 highs. Support is now at previous resistance: ~SPX 4600. Given that all the technical indicators are firmly pointing higher, without any negative divergences or sell signals, looking higher is the preferred path forward.

Bottom Line: Over the last two weeks, I shared how the SPX was exhibiting a bullish pattern, called a falling wedge or an ending diagonal C-wave in EWP terms, and I “therefore … expect[ed] to top out at 4600+/-100, a pullback to around 4400+/-100, and then a rally to SPX5100+/-100.” So far, so good. And it appears, based on the rally’s strength, that SPX 4700 is next.

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