Yesterday’s analysis expected upwards movement for Tuesday’s session from the S&P 500 which is what happened.
The wave count remains the same.
Click on the charts below to enlarge.
This wave count agrees with MACD and has some nice Fibonacci ratios in price and Fibonacci relationships in time.
Minor wave 3 is 15.1 points longer than 2.618 the length of minor wave 1.
Ratios within minor wave 3 are: there is no Fibonacci ratio between minute waves iii and i, and minute wave v is 5.44 points longer than equality with minute wave iii.
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. At 1,736 minute wave v would reach 0.618 the length of minute wave iii.
Within minor wave 5 no second wave correction may move beyond the start of the first wave. This wave count is invalidated with movement below 1,560.33.
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.
At this stage it looks like minor wave 5 may not exhibit a Fibonacci time relationship. However, the next Fibonacci number in the sequence is 55 which could see minor wave 5 ending on 10th September (give or take a day or so either side). This may be the next possibility. At that time I will see if the structure could be considered complete, or not.
Keep drawing the wider parallel channels from the monthly chart and copy them over to the daily chart.
Before price moved higher for the session a slight new low was made. This changed the structure of the correction for minuette wave (ii) but has no effect on expected direction, target calculation or the invalidation point.
This analysis of minuette wave (ii) has a better overall look than yesterday’s wave count. Minuette wave (ii) may have unfolded as a double zigzag which ended early in Tuesday’s session.
Within the first zigzag of the double, labeled subminuette wave w, there is no Fibonacci ratio between micro waves A and C.
The double is joined by a three in the opposite direction, an expanded flat labeled subminuette wave x. Within subminuette wave x micro wave C is 0.44 short of 2.618 the length of micro wave A.
Within the second zigzag of the double, labeled subminuette wave y, micro wave C is just 0.03 points short of 0.618 the length of micro wave A.
A best fit parallel channel drawn about minuette wave (ii) is breached by upwards movement. This gives us trend channel confirmation that minuette wave (ii) is over and minuette wave (iii) should have begun during Tuesday’s session.
At 1,737 minuette wave (iii) would reach 1.618 the length of minuette wave (i). This target is a mid term target, and it may be one to a few weeks away.
When there is more structure within minuette wave (iii) to analyse, specifically when subminuette wave iv within it has ended, I will add to this target calculation at a second wave degree and so it may widen to a small zone or it may change.
Within minuette wave (iii) no second wave correction may move beyond the start of the first wave. This wave count is invalidated with movement below 1,682.62.
Alternate Wave Count.
While price remains below 1,709.67 it will remain possible that we have recently seen a trend change at cycle degree. However, we should always assume the trend remains the same until proven otherwise.
We should assume the upwards trend remains valid until this wave count is confirmed with movement below 1,560.33, and then with a breach of the black parallel channel on the daily chart.
If we have seen a trend change then we should see some increase in downwards momentum this week.
Movement below 1,676.03 would provide initial indication that this wave count may be correct.
At 1,660 subminuette wave iii would reach 1.618 the length of subminuette wave i.
Within subminuette wave iii, micro wave 2 may not move beyond the start of micro wave 1. This wave count is invalidated with movement above 1,700.18.