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Both Elliott wave counts expected a trend change, but upwards movement has continued. This changes the probability of these two Elliott wave counts.

Summary: Both the main and alternate daily wave counts still expect downwards movement from here, and both expect a trend change at intermediate degree. The depth, structure and momentum of downwards movement will tell us which wave count is correct in coming weeks. At this stage I would judge these two wave counts to now be even in probability.

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Main Daily Wave Count

Within primary wave 5 intermediate wave (1) fits perfectly as an impulse. There is perfect alternation within intermediate wave (1): minor wave 2 is a deep zigzag lasting a Fibonacci five days and minor wave 4 is a shallow triangle lasting a Fibonacci eight days, 1.618 the duration of minor wave 2. Minor wave 3 is 9.65 longer than 1.618 the length of minor wave 1, and minor wave 5 is just 0.51 short of 0.618 the length of minor wave 1. Although I am still confident this movement is a complete impulse, the alternate wave count is also reasonable (but has a lower probability).

Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 1,345.22. If this invalidation point is passed this main wave count would be invalidated and the alternate daily wave count would be confirmed.

Intermediate wave (2) is now a complete expanded flat correction. Minor wave C is longer than 1.618 the length of minor wave A, and there is no Fibonacci ratio between them. Minor wave C is now a complete expanding ending diagonal.

Within an ending diagonal all the sub waves must subdivide as zigzags. The fourth wave should overlap first wave price territory. The rule for the end of a fourth wave of a diagonal is it may not move beyond the end of the second wave.

Within the final zigzag up of minute wave v minuette wave (c) now looks like a clear five wave structure on the daily chart. Minute wave v now has a clear corrective count of seven.

Draw a “best fit” channel about minute wave v zigzag. When this green trend channel is clearly breached by a full daily candlestick below the lower green trend line and not touching it, then I would have a lot of confidence that there has been a trend change at intermediate wave degree. Only a new low below 1,131.09 would provide full and final price confirmation that downwards movement is intermediate wave (3), but we should be alerted to it before that price point is passed by looking at structure and momentum. Intermediate wave (3) may only subdivide as a five wave impulse, and it should show a clear strong increase in downward momentum.

Draw the maroon trend line on a weekly chart on a semi-log scale, and copy it over to a daily chart also on a semi-log scale (see this analysis for a weekly chart). This trend line is now clearly breached with one full daily candlestick above it and not touching it. This reduces the probability of this wave count substantially to about even with the alternate. If this maroon trend line is breached on the weekly chart, with one weekly candlestick above it and not touching it, then I would discard this wave count in favour of the alternate. At the end of this trading week we may have an answer.

The breach of this trend line should be taken as a strong warning that this wave count may not be correct.

Minuette wave (c) is again a complete five wave impulse, with the final fifth wave extending higher. A new low below 1,272.23 would be earliest confirmation of a trend change, as at that point downwards movement may not be a second wave correction within subminuette wave v, and so subminuette wave v would have to be over.

Ratios within minuette wave (c) are: subminuette wave iii has no Fibonacci ratio to subminuette wave i, and subminuette wave v is now 1.18 short of 0.618 the length of subminuette wave iii.

Draw a best fit channel about minuette wave (c). When this orange channel is clearly breached with downwards movement that would provide early indication that there has been a trend change. A new low back into minuette wave (a) price territory below 1,223.23 would provide strong price confirmation of a trend change, as that would eliminate the possibility that this upwards wave of minute wave v is a continuing impulse because price would be back in what would be its first wave territory.

Once the orange channel is breached I will move the invalidation point down to the end of intermediate wave (2) for this wave count. While we still have absolutely no confirmation of any trend change I must allow for the possibility that this final fifth wave could continue higher again today, although the probability of this happening now is further reduced.

On the one minute chart the first downwards wave fits perfectly as a zigzag. This does not support the idea of a high in place, and so I must allow for the possibility that the high has not quite been reached.

This wave count for minuette wave (c) fits perfectly with momentum. Subminuette wave iii exhibits the strongest upwards momentum. There is now double divergence on the hourly chart. This is an indicator of a trend change here or soon.

Alternate Daily Wave Count

If price breaks above 1,345.22 this would be my only wave count. At this stage, despite its problems, I judge this wave count to have a about an even probability with the main daily wave count.

Intermediate wave (2) is a rare running flat. This is entirely possible just before a strong third wave, with the downwards pull of a third wave forcing minor wave C to be slightly truncated. However, within intermediate wave (2) minor wave C looks clearly like a three wave structure on the daily chart and this is a considerable problem. If you’re going to label a running flat it is essential that the subdivisions fit perfectly. This is still my main problem with this wave count.

Intermediate wave (2) is a 58% correction of intermediate wave (1), and is a running flat. Intermediate wave (4) is a 52% correction of intermediate wave (3) and is a double zigzag. There is little alternation in depth, but perfect alternation in structure.

Ratios within primary wave 5 are: intermediate wave (3) is just 1.09 longer than 2.618 the length of intermediate wave (1), and intermediate wave (5) has no Fibonacci ratio to either of intermediate waves (1) or (3).

Intermediate wave (5) still looks like a zigzag rather than an impulse, and has a corrective wave count. This also reduces the probability of this wave count.

It is entirely possible that there was a leading expanding diagonal as the first five up within primary wave A. For diagonals the contracting variety is more common than expanding, and ending diagonals are more common than leading. While a leading expanding diagonal is not rare, it is not very common either. This very slightly also reduces the probability of this wave count.

Leading diagonals are almost always followed by very deep second wave corrections, often deeper than the 0.618 Fibonacci ratio of them. This wave count expects a big deep correction downwards. It should subdivide as a clear three on the daily chart, where the main wave count now expects a clear five down.

I have tried to see if this upwards movement could subdivide as a series of overlapping first and second waves, and I cannot yet see a solution which has a good fit.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,131.09.

This analysis is published about 5:19 p.m. EST.