Legendary Technician Tom DeMark, who Advises the likes of Steve Cohen and George Soros was on Bloomberg today calling for a continuation of last week’s rally. Based on today’s close of 1257 on the S&P500, DeMark is looking for another 6% move to the upside over the next couple of weeks.
Here is the video from Bloomberg:
I must say that I agree with DeMark’s targets, but for different reasons. Last Tuesday I put up my Elliott Wave count for the S&P500 on Chart.ly. The measured move for, what I believe is, the C-wave up, takes us to 1344. The math is simple here: We take the difference in closing values of the corrective A wave up of 186 (1099 low & 1285 high) and add it to 1158, which was the closing low of the B wave down from Thanksgiving week. The 61.8% Fibonacci retracement of that A-wave up, is where B down came to an end. This is pretty standard. We are presuming here that C-up is equivalent to the first thrust higher off the early October lows (that we call A-up).
So if A = 186, and C = 186, then we should top out at 1344, which is right around where DeMark is looking. If I’m right about this pattern, and this is the top, then then next move lower could be ugly. But let’s reevaluate the situation when we get there.
Here is my wave count: