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February 20th - US core PCE inflation rose more than expected in December, and various signs indicate that inflation will accelerate further in January, reinforcing market expectations that the Federal Reserve will not cut interest rates before June. Data released Friday by the US Bureau of Economic Analysis showed that, excluding volatile food and energy prices, the core PCE index rose 0.4% month-over-month in December, compared to economists forecasts of a 0.3% increase. The core PCE inflation rate rose 3.0% year-over-year, compared to 2.8% in November. Core PCE is one of the Federal Reserves most favored indicators. This data is included in the fourth-quarter GDP forecast report released Friday. Although the US Bureau of Labor Statistics Consumer Price Index report released last week showed a moderate increase in Januarys CPI, inflation in the service sector still exhibits some lag. Economists also noted a surge in legal services prices in January.February 20th - U.S. economic growth lagged behind expectations at the end of last year, dragged down by a record government shutdown, weak consumer spending, and trade. According to preliminary estimates released by the U.S. government on Friday, the annualized growth rate of gross domestic product (GDP) in the fourth quarter, adjusted for inflation, was 1.4%, down from 4.4% in the previous quarter. Data from the Bureau of Economic Analysis showed that the overall economy grew by 2.2% last year. The weak economic performance fell short of all expectations in a Bloomberg survey of economists, as the U.S. government was shut down for nearly half of the three-month period during the quarter. The Bureau of Economic Analysis stated that the government shutdown reduced GDP by about one percentage point. Despite the slowdown at the end of the year, these figures still marked a solid year for the U.S. economy. The U.S. economy contracted in the first quarter due to a surge in imports before tariffs took effect, but subsequently achieved one of its strongest growth rates in years. This turnaround was thanks to Trumps abandonment of the toughest tariffs and the Federal Reserves interest rate cuts, which propelled the stock market to record highs and enabled wealthy Americans to continue spending.February 20th - The U.S. economy slowed in the fourth quarter of last year, impacted by the record government shutdown and slowing consumer spending. Data released Friday by the Commerce Department showed that, after seasonal and inflation adjustments, the annualized growth rate of U.S. gross domestic product (GDP) in the fourth quarter was 1.4%. Economists surveyed by The Wall Street Journal had expected a figure of 2.5%. The fourth-quarter growth rate was a significant slowdown from the astonishing 4.4% growth rate seen in the summer. Federal government spending fell by 16.6% in the fourth quarter.German Finance Minister Klingbeer on ECB President Lagardes term: This is just speculation, and I will not participate in speculation.Following the release of the latest economic data, U.S. short-term interest rate futures showed little change; traders continue to bet that the Federal Reserve will cut rates in June.

Can the S&P 500 Still Reach 4300?

Steven Zhao

Mar 01, 2023 15:55


The Revision was carried on

Using the Elliott Wave Principle over several weeks, we were able to effectively monitor the highs and lows of the S&P 500 (SPX) (EWP). As a result, we discovered in our most recent update from two weeks ago that, "Thus, unless the SPX falls below Friday's bottom at $4060, we see no reason not to anticipate $4260-4295. Sorry there was no update last week, as I was on a vacation. The gauge will then likely retrace for several weeks before making a recovery to the optimal price of $4395+/-25.


Sadly, the $4060 low, which might have served as a stop loss, did not hold, and the index fell further until it reached a bottom of $3943 last Friday. Therefore, even though the EWP can be used to make many accurate predictions, nobody can always anticipate everything. Because of this, all we can do is "predict, watch, and modify as needed". We expected $4060 to remain stable. We kept an eye on it and discovered that it did not, so we adjusted our initial projections to the EWP figure depicted in Figure 1 below. So let me clarify.

When support fails, an alternative EWP option emerges

The recovery from the December bottom was not a five-wave impulse structure based on the standard Fibonacci sequence (SFFIS). Quite the opposite. When we expect a fifth surge higher, the market falters and falls short, just like all rises we've seen since 2022. As a result, we continue to work with (possible) a-b-c structures, which are much less trustworthy than the SFFIS. Welcome to Super Cycle IV, the fourth cycle in this instance. In addition, an SFFIS is frequently present if we anticipate a C-wave recovery off the December bottom.


However, the rise can only be classified as five waves if the latest "sell-off," which has been rather orderly and overlapping, is classified as an Expanding Ending Diagonal (EED) C-wave. However, because they frequently travel in contiguous a-b-c patterns and do not have as precise (Fib-based) principles as an SFFIS, diagonals are unstable. An ED can basically do whatever it wishes as long as W-3 is not the smallest and W-4 does not extend below the commencement of W-3, which is the conclusion of W-2. The EWP regulations for the EED are shown in Figure 1 above.


Thus, regrettably, with last week's extended slide into the lower end of support, we are left with two less-than-ideal tallies since the December lows: an EED vs. a bigger a-b-c. To see an alternative a-b-c, refer to figure 2 below. Both EWP numbers are far from optimal and have their problems. Sadly, this makes it challenging to express a high level of trust in regard to our main anticipation.


Not my problem. Simply put, that is the setting we are in. For additional hints to determine the likelihood of each option, we at Intelligent Investing also inform our Premium Members on a variety of other signs and plots, such as market width, trends, and mood.

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