Hmm ok so here's some potential interpretations based on Elliot Wave. Blind Freddy can see we have complete 5 waves up in mutiple degrees and we have entered a corrective phase. Now that corrective phase might typically correct 38-64% of the previous run..But correcting 38-64% of what run?
Is it 38-64% of the run-up from the October 2022 lows? Perfectly valid wave count...(see the blue 1,2,3,4, count)
At a higher degree, have we now completed 5 higher degree waves up. Is it correcting the run-up from the 2009 lows? Again, a perfectly valid wave count (see yellow 1,2,3,4,5)
Or if we zoom out further, are we expecting a 38-64% correction of the entire SPX since its inception. Once again, a perfectly valid wave count (see Green III, IV and V. For those who don't follow Elliott Wave counts there have only been a couple of times in the last 20 years that you could place a green V as the terminating wave count and then wait for an invalidation to prove you wrong. March 2025 is one such time.
My gut feel is that the first chart is correct and that my count is invalid. Instead of this small (well, small in context) wave marking the bull market's complete culmination, it only marks a higher degree Wave 1. After Wave 2 corrects, Wave 3,4 and 5 need to play out over the next 5-12 years. This scenario makes more sense for a true collapse, as we'd expect the USA to hit 130% of debt to GDP some time around 2032 - 2037. Over 97% of countries that hit this ratio, default.
These counts at least provide some structure - we know that if the October 2022 lows are breached, the first chart is out, and we are correcting a larger degree count (see middle chart).
