The S&P 500 moved slightly lower, in slow sideways movement for Tuesday’s session. I had expected a small correction to begin the session, but I had expected it would be over within a very few hours. It took longer than expected.
I still have only one wave count with one daily and one hourly chart today. I expect this trend to continue for a while yet until price reaches the targets calculated.
Click on the charts below to enlarge.
This wave count sees the S&P 500 as within a final fifth wave upwards to complete a large correction at intermediate (black) degree. If wave Y blue is to have a Fibonacci time relationship then it may take another 6 sessions to complete, lasting a Fibonacci 89 days. Please note though that Fibonacci time relationships are not as reliable as price ratios, and this expectation of another 6 sessions is a rough guide only.
Wave (B) black is correcting the three wave structure of wave (A) black within a flat correction at primary degree. The maximum common length for wave (B) black in relation to wave (A) black is 138%. This would be achieved at 1,464 and it is likely we shall see a trend change before this price point is reached.
At 1,432 wave (v) green would reach 0.618 the length of wave (iii) green. At 1,434 wave v orange within wave (v) green would reach equality with wave iii orange. This is our first target for upwards movement to end.
If price continues through the first target, and the structure requires further upwards movement to complete it, the second target is at 1,445 where wave (v) green would reach 2.618 the length of wave (i) green. At 1,443 wave v orange within wave (v) green would reach 1.618 the length of wave i orange. This gives us a second two point target zone.
Within wave (v) green no second wave correction may move beyond the start of the first wave. This wave count is invalidated with movement below 1,340.03.
We should keep drawing the parallel channel on the daily chart about the zigzag of wave Y blue. Draw the first trend line from the start of Y blue to the low labeled b pink, then place a parallel copy on the high of a pink. Only when this channel is breached by a full daily candlestick below it shall we have confirmation of a big trend change, and until that time we should expect upwards movement to continue.
Wave 2 purple has taken longer than expected, but it is still a typical looking correction and subdivides so far perfectly into three waves. It is very likely that it is over here and the next movement would be a small degree third wave upwards.
Before wave 2 purple began though the session started with a little more upwards movement. Ratios within wave 1 purple now are: wave (3) aqua is 1.45 points longer than 1.618 the length of wave (1) aqua, and wave (5) aqua is now just 0.05 points short of equality with wave (1) aqua.
Within wave 2 purple wave (C) aqua is just 0.25 points longer than 1.618 the length of wave (A) aqua.
We may use Elliott’s technique to draw a parallel channel about the downwards zigzag of wave 2 purple. When this very small aqua channel is breached by upwards movement then we shall have confirmation that wave 2 purple is over and wave 3 purple is underway.
There are a few possible targets for wave 3 purple to end. At 1,432 it would reach 0.618 the length of wave 1 purple. This would indicate that the second target zone for (B) black to end is more likely.
At 1,444 wave 3 purple would reach equality with wave 1 purple. This would indicate that the second target zone is too low and would need to be recalculated.
While we do not have trend channel confirmation that wave 2 purple is over we must accept the possibility that it could continue lower as a double zigzag, combination or flat correction. Wave 2 purple may not move beyond the start of wave 1 purple. This wave count is invalidated with movement below 1,386.93.
Wave 3 purple may find resistance about the upper edge of the orange parallel channel.