Elliott Wave Investor: Positive Signals 460 Remains a Key Level

While the stock market rally since November has slowed down, it’s not quite over yet. The latest employment data shows that the labor market continues to slow down. Typically, that’s bad news for the economy. But since the Fed has been raising interest rates to slow inflation, it’s a positive sign.

For the moment, that leaves the S&P 500 near a 4,600 level, close to its July highs. And it’s near an all-time high going back to its 2021 peak.

For now, that 4,600 level, or 460 for those trading SPY, looks like a resistance point.

It’s where bears have to defend the market. If the 4,600 level breaks, bullish investors may push stocks to new highs.

However, the rally of the past few weeks has created a number of price gaps.

Typically, markets try and fill these gaps. After the market’s big move higher, having a small 2-3 percent pullback in the coming week or so could fill one or two of those gaps.

From there, stocks would be less overbought and in a better position to remain higher.

So, traders should look for markets to have a poor week next week. But then trend higher into the final weeks of the year. That could even allow stocks to push to all-time highs in January.

After that, the market’s next move will depend on the latest economic data.

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