US Market Outlook 4 May 2023

Reasons to remain neutral until 4200-4300 resistance can be broken above:
→ our Elliott Wave count remains bullish bigger picture yet time is running out
→ major support zone at 3600 – 3400 continues to hold strong which is a positive
→ the hawkish interest cycle is being closely monitored
→ Elliott triangle now highly evolved

Well here we are another week on and the plot continues to thicken on the S&P-500. Price ended up probing a little higher again since our last review up to 4187, yet still falling short of our Wave-B high circa 4196. Sticking to the strict definition of an Elliott symmetrical triangle the Wave-D high needs to lock in lower than the Wave-B high and for now, this is how things have played out. This has certainly been a work in progress yet as soon as price can break above 4187 and then 4196, our sights will then be set on it finally breaking above the overhead resistance zone circa 4200-4300, which will be a significant development from a technical perspective.

So more immediately our ideal situation would be for some further minor weakness to take place from here over the next week or two. 100 points or so should do it as part of a clearly defined 5th swing in the form of a Wave-E. The 200-day MA which is presently acting as dynamic support sits around the 4000 zone which is also a nice round psychological number that always has trader interest. So a dip to here to bring out a more sustained round of buying would certainly be a big positive in our books.

We do need to highlight where things start turning sour though. As you know an option within our bigger picture analysis is that we could have a significant high locked in back in January 2022 at the all-time highs. This is not our preferred stance, yet it could easily turn that way if price were to break below the Wave-C low at any stage circa 3808. With the Bears taking back over for real below the lower boundaries of the support zone at 3400. Hopefully it doesn’t come to that yet we need to always keep an open mind when it comes to the markets. We are certainly in for a very telling next few weeks.