Upwards movement was expected. Downwards movement did not invalidate the Elliott wave count at the hourly chart level.

Summary: Downwards movement may end about 2,049 – 2,047. Thereafter, upwards movement should resume. The mid term target remains at 2,138.

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Bull Wave Count

I will favor neither the bull or bear wave count. Both are viable and both expect this current upwards impulse may again be close to complete.

To see a weekly chart with subdivisions and how to draw trend lines and channels click here.

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.

Within intermediate wave (5) minor wave 2 is an expanded flat and minor wave 4 is a zigzag. Minor wave 3 is 14.29 points longer than 1.618 the length of minor wave 1.

At intermediate degree there is also a very close relationship between intermediate waves (3) and (1): intermediate wave (3) is just 0.76 points less than 2.618 the length of intermediate wave (1).

The aqua blue trend lines are traditional technical analysis trend lines. These lines are long held, 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 minute wave ii may have ended just short of the lower aqua blue trend line, which gives the wave count a typical look.

There is still triple technical divergence between MACD and price at the weekly chart level.

Minute wave i lasted seven weeks, 36 days, which is two days longer than a Fibonacci 34. Minute wave iii may last 21 or 34 days in total if it is to be 0.618 or even in duration to minute wave i. This would see it continue for a further 11 or 24 trading days.

Minute wave iii may show its subdivisions clearly on the daily chart. Recent downwards movement looks like a second wave correction which may not move beyond the start of minuette wave (i) below 1,972.56. At 2,133 minute wave iii would reach 0.618 the length of minute wave i.

At 2,191 primary wave 3 would reach 1.618 the length of primary wave 1. This would expect that minor wave 5 is either an ending contracting diagonal (minute wave i would be seen as a zigzag, which is possible) or within minor wave 5 minute wave iii will be shorter than minute wave i, and minute wave v will be shorter still. Both these scenarios are possible. Or the target is wrong.

This downwards movement is too big to be a fourth wave correction; it looks more like a second wave, and may be subdividing as a zigzag.

The wave count within the upwards movement is adjusted and moved down one degree. Ratios within minuette wave (i) are: subminuette wave iii is 5.09 points short of 2.618 the length of subminuette wave i, and subminuette wave v has no Fibonacci ratio to either of subminuette waves i or iii.

Within the zigzag of minuette wave (ii) at 2,049 subminuette wave c would reach 2.618 the length of subminuette wave a. This is close to the 0.382 Fibonacci ratio of minuette wave (i) at 2,047.

If price breaks below this target look out for downwards movement to find strong support at the upper aqua blue trend line on the daily chart, where it may end.

Alternate Bull Wave Count

Alternatively, minor wave 5 may be an ending contracting diagonal. Within an ending diagonal all sub waves must be zigzags, and the fourth wave must overlap back into first wave price territory.

This alternate also now expects more downwards movement, with second and fourth waves within diagonals being normally deep. Minute wave iv may find support at the upper aqua blue trend line. It may not move beyond the end of minute wave ii below 1,972.56.

This alternate may see a swift end to primary wave 3, which may not exhibit a Fibonacci ratio to primary wave 1. The final fifth wave of the diagonal would be very likely to end with a very small overshoot of the upper i-iii diagonal trend line.

Bear Wave Count

This bear wave count differs from the bull wave count at the monthly chart level and at super cycle wave degree. To see the historic picture go here.

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.

At cycle degree wave b is over the maximum common length of 138% the length of cycle wave a, at 165% 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 05:50 p.m. EST.