S&P500 Long-Term Chart: Sell in May?

Hope everyone had a nice weekend! Most of the Elliott Wave world was expecting a 3-wave 'abc' upmove since the big bear market. But in the last month or so, with SPX exceeding 1150 and still strongly uptrending, we seem to be moving up in a 5th wave(many other US indices had done the same earlier). This persistent uptrend, has frustrated a lot of bears out there, and may continue to do so for a while. As i posted in one of the comments on this blog, this may be the year where we "sell in may and go away"! This would also allow Shanghai to keep up its recent correlation, and head up to 3200 in Wave D, while dragging Hang Seng along for the ride towards 22000.

Here, i would like to highlight potential areas of turn, if we indeed head higher. Meanwhile, do keep in mind that we're still in the overbought zone on the daily chart.

Resistance - 1220

This target is based on the parallel trend channel(red) resistance area from the 2000 high. Also, happens to coincide with the 61.8% fibonacci retrace of the entire decline.

Resistance - 1315

The first wave up from the lows was 290 points, third wave up was 280 points, so if the fifth wave up is 270-290 points, we would get 1315-1335 range. You will also notice from the chart that this area is a historical area of resistance for the index (black line).

I'll update this chart again, if we indeed go higher.

Short-Term: Why a crash is unlikely

First, the obvious strength in the face of overbought conditions. Secondly, price is nowhere near the uptrendline connecting the two lows(long-term chart) & well within the current uptrend channel(chart below), which makes any crash or plunge very unlikely. A correction has likely already started, but it has multiple supports (recent highs, channel support, uptrendlines, 200-day moving avg,etc). And lastly, sentiment readings do not indicate excessive bullishness.

We may continue to correct sideways (between 1170-1144) in the week ahead in very choppy action, in what could be a potential wave 4. Support is in the 1140 area. This may be followed by a spurt higher in a wave 5. However, a sharp and continuing break below the channel support line(red) would mean something else is at play here.

Not the best place to be entering the market, unless one is a daytrader. All the best for the week ahead!