S&P500 (SPX) market forecast for 2019

It's that time of the year again - time to create my market forecast for 2019.

To recap, SPX followed through beautifully on the forecast published in December 2017, and fine-tuned on Feb 5, 2018 -- SPX held stated support in its pullback at the start of the year, and provided a new high into the target box in the second half of the year. That concluded what I viewed as the high probability portion of the long-term rally, opening up potential to completion of the entire structure off 2009 low. Now that the "easy" part is over, it gets tricky. And, because we are dealing with the larger degree pullbacks at this point, I have to disclaim that this forecast is really a five year forecast rather than a 12-month forecast.

At the time of writing, SPX is trading right around 2500, a respectable 15% decline off the top after it completed the pattern that was expected of it for 2018. The degree of confidence at which I can forecast going forward, given that we are dealing with the larger degree moves, is that 1810 will not see a sustained break, and that against that support, a move reaching at least 3383 will develop in the next five years. Yes, that's a potential drawdown of 28% from here, for a potential gain of 35%+. Ideally, during the course of 2019, we will see a deeper decline which will provide for a more attractive risk/reward (while my annual forecast focuses on the larger degree moves, I do continuously update my forecast with the smaller degree, more immediately actionable, support/resistance levels available to my consulting clients). If, during the course of the next year, further clarity with respect to a tradable bottom develops, I will attempt to update my forecast with more precise levels. Until such time, this is my degree of confidence.