Now, I am no Wolfe wave expert. My knowledge of Wolfe waves is limited to what I found on investopedia. However, recently I have enjoyed some success with ES on very short time frames with this pattern. In an earlier post, I identified some Wolfe waves on daily SPX charts. Yes, the pattern appears on daily charts too!
So, next step was to apply it to the weekly charts. I mean candlesticks are candlesticks! To my surprise, I did not have to look too far. The bullish wave since 2009 seems to fit very well into a Wolfe wave pattern. It is not there yet but from what I have seen so far, it is close.
Wave 3 is 127 fib extension of wave 1 and wave 5 is very close to the 127 fib extension of wave 3. The 127 fib for wave 5 should be 1468.41. That is not too far off and I see no reason why it can't be achieved in a few weeks from now. This is also along the lines of the target I have in mind for SPX in the near future where I have us in the last leg to the upside.
If it does play out as expected and we get the move to the downside over the next year, the target could easily be the 61.8 retrace of the bull move to a little less than a 1000 (early 2013) or 78.6 retrace to mid 800s (mid 2014). That is pretty bearish. I don't know if this will play out as such. There is no pattern that is guaranteed to work and this one hasn't even finished setup yet! However, I will be keeping an eye on this one and post updates.