Yesterday’s analysis expected to see choppy, overlapping upwards movement for a few days. This is not what happened. Movement below 1,680.34 invalidated the hourly wave count before price made a new low.

The daily wave count remains the same.

Click on the charts below to enlarge.

At 1,740 intermediate wave (C) would reach equality with intermediate wave (A). At 1,739 minor wave 5 would reach 0.618 the length of minor wave 3.

If price rises through this first target the next target will be used. At 1,849 minor wave 5 would reach equality with minor wave 3.

When minute waves iii and iv within minor wave 5 are complete I will add to the target calculation at minute wave degree, so at that stage it may change.

Minor wave 1 lasted a Fibonacci 21 days, minor wave 2 lasted a Fibonacci 8 days, minor wave 3 has no Fibonacci duration at 98 days, and minor wave 4 lasted 22 days, just one day longer than a Fibonacci 21.

Minor wave 5 may not exhibit a Fibonacci time relationship. The next possibility may be the 29th of October (give or take two days either side of this date) where minor wave 5 would have lasted a Fibonacci 89 days. This is a date to look out for, but cannot be relied upon because Fibonacci time relationships do not occur often enough to be reliable.

Keep drawing the wider parallel channels from the monthly chart and copy them over to the daily chart.

*The alternate daily wave count which looked at the possibility of minor wave 5 unfolding as an ending diagonal is now invalid. Ending diagonals require all sub waves to subdivide as zigzags, and with a double zigzag unfolding downwards this cannot be part of an ending diagonal.

Minuette wave (ii) is continuing lower as a double. This is most likely a double zigzag because micro wave A of the second structure subdivides nicely as a five wave leading diagonal. Within the second zigzag labeled subminuette wave y micro wave B may not move beyond the start of micro wave A. This wave count is invalidated in the short term with movement above 1,696.95.

When micro wave B is completed I would expect downwards movement for micro wave C. This may take another one to three sessions to complete.

When micro wave C is completed I would again look for a trend change. The next wave upwards should be a third wave within a third wave.

Minuette wave (ii) may not move beyond the start of minuette wave (i). This wave count is invalidated with movement below 1,627.47.

Thanks Lara

BTW that wave 1 is just more than 61% of A,so Im wondering if some other pattern could be developing

Hi Lara,on the South African Top 40 I have it as down in a 1,2 1,2 3,4 3,4 and 5 which I will call an A wave,we then retraced up in a zigzag to 50% of A.Then we did what looks like a diagonal wave 1 down.My question now is if I am correct,will the wave 3 and 5 also be diagonals ?

it’s really hard for me to judge if this idea is correct without seeing a chart, and the South African Top 40 is not a market I’ve analysed.

I would need a link to a chart to answer your question.

third waves cannot be diagonals, they must be impulses.

the sole exception to this rule is a third wave within a diagonal; within an ending diagonal it must be a zigzag, within a leading diagonal it is most commonly a zigzag but may also be an impulse.

This appears to want to test the lower trend line, that would be the lowest risk long entry…

The triangle above is subdividing into numerous consecutive harmonic patterns with the last one at 1711 on the daily,

This only happens during corrective phases.. and happened on the sp500 when it was in a large triangle a few months back

What invalidates the current count above vs a diagonal?

an invalidation of the daily chart below 1,627.47 would either indicate a huge diagonal unfolding, or a trend change at cycle degree.

Yes I think that may be unlikely (although it would be great) due to us govt shutdown and no NFP stats so no taper talk… only fundamental trigger could be the debt ceiling oct17 which is still 1.5 weeks away and plenty of time to rally till then