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Status of S&P-500 Index (March 2020)

This post is also available in: French

Excerpt from: “Crystal Ball for Investing and Trading” Book.

Status of the S&P-500 Index

The S&P-500 index represents the evolution of 500 highest capitalization companies trading in the US NYSE and NASDAQ exchanges. S&P-500 seems to mirror relatively well the evolution of Dow Jones index. Therefore, comments for DJ-30 apply to S&P-500 as well.

Figure 13.16 shows a monthly chart of S&P-500 from 1963 to March 20, 2020. Like Dow Jones, the pattern taken by S&P-500 is somewhat an expanding triangle even though the high of 2007 did not go much higher than the top of 2000. It is worthwhile noticing that S&P-500 broke strongly through the horizontal resistance line upward, in 2012.

The S&P-500 historical top occurred with a record price of 3,393 points on February 19, 2020.

Figure 13.16- chart courtesy of TC2000.com

The bullish wave from 2009 to February 2020 corresponds to subwave D (or Cycle degree wave 5) of Dow Jones. Since February 20, either subwave E (or Grand Super Cycle degree wave 4), both bearish, have started,

The current wave should bring the S&P-500 down to its area of 2009 or even 1987 for a price of 417 or even 130 points.

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