Upwards movement was expected, but price moved lower for the session to complete a red candlestick. The invalidation point was not breached.
Summary: I expect more upwards movement to a target at 2,133. If it ends in another five sessions minor wave 5 may total a Fibonacci 21.
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Bullish Wave Count
Upwards movement from the low at 666.79 subdivides as an incomplete 5-3-5. For the bull wave count this is seen as primary waves 1-2-3.
The aqua blue trend lines are traditional technical analysis trend lines. These lines are long held (the lower one has its first anchor in November, 2011), repeatedly tested, and shallow enough to be highly technically significant. When the lower of these double trend lines is breached by a close of 3% or more of market value that should indicate a trend change. It does not indicate what degree the trend change should be though. It looks like the last four corrections may have ended about the lower aqua blue trend line, which gives the wave count a typical look. To see a weekly chart where I have drawn these trend lines go here.
I have pulled the upper trend line down a little to touch the low of minute wave a within minor wave 4. This may be a better position for recent movement.
The wave count looks at intermediate wave (5) as an ending contracting diagonal. Ending diagonals require all sub waves to be zigzags. So far this is a perfect fit. Minor wave 3 has stronger momentum than minor wave 5 on the daily chart.
The diagonal is contracting. The only problem with this possibility is that minor waves 2 and 4 are more shallow than second and fourth waves within diagonals normally are. In this case they may have been forced to be more shallow by support offered from the double aqua blue trend lines.
Because the third wave within the contracting diagonal is shorter than the first wave and a third wave may never be the shortest wave, this limits the final fifth wave to no longer than equality with the third wave at 2,253.79.
Within intermediate wave (5) minor wave 1 lasted 238 days (5 days longer than a Fibonacci 233), minor wave 2 lasted 18 days (2 short of a Fibonacci 21), minor wave 3 lasted 51 days (4 short of a Fibonacci 55) and minor wave 4 lasted 23 days (2 longer than a Fibonacci 21). While none of these durations are perfect Fibonacci numbers, they are all reasonably close. So far minor wave 5 has lasted 16 days and the structure is incomplete. If it continues for another five sessions it may total a Fibonacci 21
Within minor wave 5 minute wave b may not move beyond the start of minute wave a below 1,980.90. This invalidation point allows for the possibility that minute wave a is incomplete and minute wave b is yet to unfold, although this idea does not fit with momentum on the hourly chart.
At 2,133 minute wave c would reach equality in length with minute wave a.
Contracting diagonals normally have fifth waves which end with a slight overshoot of the 1-3 trend line. This is still my expectation.
Downwards movement was micro wave 2 which unfolded as a deep zigzag. I have the end of micro wave 1 leading contracting diagonal higher today, and the trend lines are a perfect fit.
I expect to see a small increase in upwards momentum as micro wave 3 unfolds tomorrow. At 2,133 micro wave 3 would reach 1.618 the length of micro wave 1.
If micro wave 2 were to continue further sideways as a double combination then it may not move beyond the start of micro wave 1 below 2,103.20.
Alternate Bull Wave Count
This wave count is an alternate because it does not fit well with momentum at either the daily or the hourly chart levels.
Within intermediate wave (5) minor wave 3 has weaker momentum than minor waves 1 and 5. This is opposite to how it should behave. However, at the weekly chart level minor wave 3 has stronger momentum than minor wave 5 so this could still fit.
At 2,191 primary wave 3 would reach 1.618 the length of primary wave 1. This would expect that within minor wave 5 minute wave iii will be shorter than minute wave i, and minute wave v will be shorter still, which would be a repeat of the pattern seen within minor wave 1. Or the target is wrong.
At 2,140 minute wave iii would reach 0.618 the length of minute wave i.
Draw the channel for this idea using Elliott’s first technique. Minuette wave (v) may end about the upper edge of this trend line.
Micro wave 2 may not move beyond the start of micro wave 1 below 2,103.20.
At this stage the wave counts do not diverge.
Bear Wave Count
The subdivisions within primary waves A-B-C are seen in absolutely exactly the same way as primary waves 1-2-3 for the bull wave count. The alternate bull wave count idea also works perfectly for this bear wave count.
To see the difference at the monthly chart level between the bull and bear ideas look at the last historical analysis here.
At cycle degree wave b is over the maximum common length of 138% the length of cycle wave a, at 167% the length of cycle wave a. At 2,393 cycle wave b would be twice the length of cycle wave a and at that point this bear wave count should be discarded.
While we have no confirmation of this wave count we should assume the trend remains the same, upwards. This wave count requires confirmation before I have confidence in it.
This analysis is published about 09:41 p.m. EST.