Downwards movement breached the first invalidation point on the hourly chart, but remained above the second invalidation point and found support at the lower edge of the channel.
Summary: Monday should complete a green candlestick on the daily chart. The target for upwards movement to end is now widened into a small zone: 1,277 – 1,281. This target may be met in two or three days time.
Click on charts to enlarge.
Main Wave Count
On the weekly chart extend the triangle trend lines of primary wave 4 outwards. The point in time at which they cross over may be the point in time at which primary wave 5 ends. This does not always work, but it works often enough to look out for. It is a rough guideline only and not definitive. A trend line placed from the end of primary wave 4 to the target of primary wave 5 at this point in time shows primary wave 5 would take a total 26 weeks to reach that point, and that is what I will expect. Primary wave 5 has just completed its 14th week.
At 956.97 primary wave 5 would reach equality in length with primary wave 1. Primary wave 3 is $12.54 short of 1.618 the length of primary wave 1, and equality between primary waves 5 and 1 would give a perfect Elliott relationship for this downwards movement.
However, when triangles take their time and move close to the apex of the triangle, as primary wave 4 has, the movement following the triangle is often shorter and weaker than expected, and this is my main reason for presenting the alternate wave count to you. If the target at 956.97 is wrong it may be too low. In the first instance I expect it is extremely likely that primary wave 5 will move at least below the end of primary wave 3 at 1,180.40 to avoid a truncation. When intermediate waves (1) through to (4) within primary wave 5 are complete I will recalculate the target at intermediate degree because this would have a higher accuracy. I cannot do that yet; I can only calculate it at primary degree.
Movement comfortably below 1,180.84 would provide further confidence in this main wave count as at that stage an alternate idea which sees primary wave 4 as continuing as a barrier triangle would be invalidated. I am not publishing this alternate idea as a chart because it has an extremely low probability.
Draw a channel about intermediate wave (1): draw the first trend line from the lows labeled minor waves 1 to 3, then place a copy on the high labeled minor wave 2. The breach of the upper edge of this channel is confirmation that intermediate wave (1) is over and intermediate wave (2) is underway.
Intermediate wave (2) may end close to a Fibonacci ratio of intermediate wave (1). Only because second waves are more commonly deep than shallow is the 0.618 ratio at 1,280.80 slightly favoured. But it does not have to be this deep.
At this stage I still have three hourly wave counts for you which look at three different corrective structures for intermediate wave (2). I present them in order of probability: a double zigzag is most likely, followed by a single zigzag, and last a flat correction. I have changed the wave count for the flat correction idea, but it still has a very low probability.
Minute wave b within this second zigzag of the double did continue further. It is now a deeper more time consuming structure, with a barrier triangle for its minuette wave (b).
Within minute wave b minuette wave (b) is now just 0.10 short of 0.618 the length of minuette wave (a).
Minute wave b found support about the lower edge of the best fit channel. Draw this channel with the first trend line from the start of intermediate wave (2) which can be seen on the daily chart, to the low here labeled minor wave X. Place a parallel copy either on the end of minor wave W or on the end of minute wave a within minor wave W which can be seen on the daily chart. The lower edge of this channel should continue to show where downwards corrections should find support.
Minor wave W lasted a Fibonacci 5 days. In the first instance I will expect minor wave Y to be of the same duration so it may end in another two trading days. But it does not have to be of the same duration. If the target is not met within another two trading days then my next expectation would be for it to be met another three days after that so minor wave Y could last a total Fibonacci 8 days.
Minute wave c must subdivide as a five wave structure, so it may only be an impulse or an ending diagonal.
Within minute wave c no second wave correction may move beyond the start of its first wave below 1,231.78.
It is possible to see upwards movement as a five wave impulse complete at the high labeled minor wave A, but the subdivisions do not have quite as good a fit as the first double zigzag hourly wave count. This single zigzag hourly wave count has a slightly lower probability.
If minor wave C upwards is to subdivide as a five wave structure then now within it minute wave ii must be complete. Because minute wave ii shows up clearly on the daily chart I would expect its counterpart minute wave iv to also show clearly on the daily chart. This would give minor wave C the “right look” at the daily chart level.
This single zigzag idea still does not diverge from the double zigzag wave count. It will not diverge until the next five up is complete.
Within minute wave iii no second wave correction may move beyond the start of its first wave below 1,231.78.
This flat correction wave count has an even further reduced probability today. I would judge it to be only about 5% likely.
If minor wave A is seen as a single zigzag then it is over at 1,249.84. When an A wave subdivides as a three then a flat correction is indicated. A flat correction would require minor wave B to retrace a minimum 90% of minor wave A at 1,189.88.
Within minor wave B minute wave a subdivides best as a five wave impulse. This indicates a zigzag may be unfolding for minor wave B. Within the zigzag minute wave b may not move beyond the start of minute wave a at 1,249.84. If this invalidation point is passed then I will discard this wave count.
Within minute wave b minuette wave (b) does not have a good fit as a triangle, and would more likely be a double flat. However, the first flat in the double labeled micro wave W is a very rare running flat. The rarity of this structure has reduced the probability of this wave count further.
Only if we see a new low below 1,221.95 would I use this wave count.
Alternate Wave Count
By simply moving the degree of labeling within primary wave 5 downwards all up one degree it is possible that primary wave 5 and so cycle wave a are over.
This wave count is reduced in probability by a small truncation. Primary wave 5 would be truncated by $2.66. The truncation is small though, so this wave count must be considered.
Movements out of triangles are often more brief and weak than expected, sometimes they are surprisingly brief.
If price breaks out of the upper edge of the parallel channel about cycle wave a (look to the weekly chart for this channel) this would be first indication that this wave count is correct. This trend channel confirmation would come before price confirmation above 1,345.22.
The first movement upwards for cycle wave b should be a five wave structure. Within it no second wave correction may move beyond the start of its first wave below 1,183.06.
Movement above 1,345.22 would invalidate the main wave count and confirm this alternate.
At this stage upwards movement is not looking like an unfolding impulse, and so this alternate wave count is further reduced in probability.
This analysis is published about 12:18 a.m. EST.