Downwards movement continued as expected. I have a new alternate Elliott wave count for you to consider today.
Upwards movement was expected for the first hourly chart, sideways movement was expected for the second, and there are still three possible Elliott wave structures which may be unfolding.
Since last analysis price has moved sideways to complete a small green candlestick for Thursday’s session (I had expected a red candlestick). The Elliott wave count remains mostly the same and the target is now calculated at three wave degrees.
Summary: The structure is incomplete. I expect more downwards movement. The new target for it to end is 1,211 to 1,206 and should be met in 24 hours.
Click on charts to enlarge.
Main Wave Count
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 4 has just begun its 10th week.
The black (B)-(D) trend line is clearly breached. I have confidence that primary wave 5 has begun. The black (B)-(D) trend line is now also clearly breached on the weekly chart. This is significant.
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 (looking at this on a weekly chart is clearer) the movement following the triangle is often shorter and weaker than expected. 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.
Minor wave 3 has now passed 1.618 the length of minor wave 1. If minor wave 3 ends within the new target zone it may still exhibit an adequate Fibonacci ratio of 1.618 the length of minor wave 1. I consider any variation less than 10% to be adequate.
Movement comfortably below 1,180.84 would invalidate the alternate daily wave count below and provide further confidence in this main wave count.
When minor wave 3 is over (I expect this to be over within 24 hours, before next analysis) I will draw a Fibonacci retracement along its entire length and expect minor wave 4 to correct up to the 0.236 or 0.382 Fibonacci ratio, so that there is alternation with the deep correction of minor wave 2. I expect this tendency to alternation may be stronger than a tendency for corrections following fifth wave extensions to reach up to the end of the second wave within the extended fifth wave.
Subminuette wave v is still incomplete, must subdivide as a five wave structure, and is unfolding as an impulse. I have adjusted the analysis of micro wave 2 within it because sideways movement for Thursday looks so clear as its counterpart fourth wave correction. This expects just one final short push down for micro wave 5 to complete the entire structure of minor wave 3 at all wave degrees.
There is no Fibonacci ratio between micro waves 1 and 3. It is more likely we shall see a Fibonacci ratio between micro wave 5 and either of 3 or 1. At 1,211 micro wave 5 would reach 1.618 the length of micro wave 1.
At 1,210 subminuette wave v would reach 1.618 the length of subminuette wave i. Because there is no adequate Fibonacci ratio between subminuette waves iii and i I would expect it is very likely we shall see a Fibonacci ratio for subminuette wave v to either of i or iii.
At 1,206 minuette wave (v) would reach 1.618 the length of minuette wave (iii). There is no adequate Fibonacci ratio between minuette waves (i) and (iii) so I would again expect it is very likely we shall see a Fibonacci ratio between minuette wave (v) and either of (i) or (iii).
This gives a $5 target zone calculated at three wave degrees. The upper edge of the zone is calculated at the lowest wave degree, and the lower edge of the zone is calculated at the highest wave degree. I favour the upper edge of the zone for this reason.
Draw a channel about minuette wave (v) using Elliott’s second technique: draw the first trend line from the highs of subminuette waves ii to iv, then place a parallel copy on the low of subminuette wave iii. Look for the downwards edge of this channel to provide support. This may be where this downwards movement for minor wave 3 ends.
Within subminuette wave v micro wave 4 may not move into micro wave 1 price territory above 1,231.74. *edit: this price point was previously given incorrectly as 1,234.74
When subminuette wave v may be seen as a completed five wave impulse then subsequent movement above 1,234.74 would provide price confirmation that minor wave 3 in its entirety is over. At that stage also movement above the upper edge of the channel would provide trend channel confirmation of a trend change at minor degree also.
Alternate Wave Count
I would judge this wave count to have a very low probability only because of proportion between primary waves 2 and 4. The main wave count sees them almost exactly of the same duration, with primary wave 2 lasting 53 weeks and primary wave 4 lasting 54 weeks. This alternate would see primary wave 4 as much longer in duration than primary wave 2. It is the proportion between second and fourth waves within an impulse which gives the wave count what is called the “right look”. This alternate would still have the right look, but it would not look as good as the main wave count.
If intermediate wave (D) is continuing it can only be as a double zigzag. For a contracting triangle intermediate wave (D) may not move beyond the end of intermediate wave (B) below 1,180.84. For a barrier triangle intermediate wave (D) should end about the same level as intermediate wave (B), as long as the (B)-(D) trend line is essentially flat. In practice this means that intermediate wave (D) could end slightly below 1,180.84 and the wave count would remain valid. Unfortunately, this invalidation point is not black and white.
If intermediate wave (D) is a double zigzag, then intermediate wave (C) must be seen as a single zigzag because only one of the five subwaves of a triangle may be a double.
It is possible to see intermediate wave (C) as a zigzag, but to do so a rather obvious triangle must be ignored after the end of minor wave A. The main wave count sees a triangle in that position. I think this reduces the probability of this alternate.
Within intermediate wave (C) the subdivision within minuette wave (i) of minute wave iii of minor wave C is problematic. On the hourly chart this upwards wave subdivides as a double zigzag and does not fit well at all as a five wave structure. This is another reason why I would prefer a wave count which sees a triangle in that position because the subdivisions of those waves fit a triangle perfectly. This further reduces the probability of this alternate.
This alternate wave count does not diverge from the main wave count at this stage, and will not diverge for another one or two weeks. The main wave count expects downwards movement to complete minor wave 3 and this alternate expects downwards movement to complete minute wave c. Thereafter, the main wave count would expect upwards movement for minor wave 4 and this alternate wave count would expect upwards movement for intermediate wave (E). If at that stage price moves above 1,280.35 for that upwards movement then the main wave count would be invalidated and this alternate confirmed.
This analysis is published about 04:29 p.m. EST.
Again, more sideways movement is not enough to provide us with clarity. The main Elliott wave count still has about a 60% probability.
Despite all four hourly wave counts from yesterday’s analysis being invalidated with movement above 1,324.86 I am still confident that the main wave count at the daily chart level is correct. I am still confident that minor wave B is incomplete. It is just the structure of minor wave B which is proving very difficult to analyze at the hourly level, which is normal for a B wave.
Summary: Upwards movement from the low at 1,308.63 simply does not subdivide as a five, so minor wave C cannot have begun there. I still expect one or two more days of sideways movement within this range before the breakout happens. When price breaks out it should be upwards.
Click on charts to enlarge.
Main Wave Count.
It is likely that only minor wave A is complete and sideways movement is an incomplete minor wave B. This wave count could see primary wave 4 last another two weeks to complete in a total Fibonacci 55 weeks which would be very satisfying analytically.
If minor wave B moved substantially lower it should find very strong resistance at the (B)-(D) trend line. A breach of this trend line would look very atypical and at that stage this main wave count would significantly reduce in probability, so much so I may discard it. However, I do not expect minor wave B to be deep; the deepest target I have for minor wave B to end is about the 0.382 Fibonacci ratio at 1,298.
Minor wave B may not move beyond the start of minor wave A below 1,240.61. Invalidation of this wave count at the daily chart level would provide full confidence in the alternate wave count.
B waves exhibit the greatest variety in form and structure of all waves. They are often very choppy, overlapping range bound movements which are extremely difficult to analyse. Flexibility in analysis is essential during B waves. I will focus in identifying the end of this sideways movement over one to two days. When it is done price should break out upwards.
The one thing I am confident of today is stating minor wave B is very unlikely to be complete. If it is labeled as a single zigzag at the low of minute wave a at 1,308.63 that would be a remarkably brief minor degree wave. Movement up from that low does not fit as part of a new five wave structure; it can be seen as neither a leading diagonal nor an impulse. I cannot see how minor wave C could have begun there.
A wave count with minor wave B complete at the low of minuette wave (x) at 1,311.49 would not make sense. That structure would be labeled a double zigzag, but the second zigzag in the double would not have moved beyond the end of the first and ended substantially before that. This would be a highly unusual and weird looking double zigzag, which does not makes sense.
I have tried to see how minor wave B could be over at the low of subminuette wave b at 1,313.55 but I can see no complete corrective structure which fits that movement.
I must conclude that minor wave B is incomplete. I expect more sideways movement before it is done.
With upwards movement minor wave B may now be a flat correction. Minute wave b is most likely to be over now and is a 95% correction of minute wave a so this would be a regular flat correction.
Regular flats normally have C waves which are equal in length with their A waves. At 1,307.51 minute wave c would reach equality in length with minute wave a.
When the small best fit channel about subminuette wave c is breached by downwards movement then I would have confidence that minute wave b is over and minute wave c downwards has begun. Price movement below 1,321.69 would fully confirm it.
Within minute wave c no second wave correction may move beyond its start above 1,332.49.
Minor wave B may also still be a regular contracting triangle. This wave count has the same subdivisions as the first wave count, but it expects only sideways movement and probably for longer than just one or one and a half days. This wave count could see minor wave B continue for a few days yet.
This third wave count is identical to the first except for the degree of labelling of micro wave 5 within subminuette wave c. If we just move the degree of labelling there down one degree it is possible that minute wave b will move a little higher.
The normal length of B waves within flat corrections is between 100% to 138% the length of their A waves. This would be achieved for minute wave b between 1,333.61 to 1,343.10.
If minute wave b reaches up to 105% or higher of minute wave a at 1,334.86 or above then minor wave B would be an expanded flat correction. I would then expect minute wave c to be 1.618 the length of minute wave a which would see it $40.42 in length.
Unfortunately, this possibility illustrates that a new high above 1,333.61 is not necessarily a breakout with minor wave B still continuing. In more traditional technical analysis terms this would be termed a “false” breakout.
Alternate Wave Count.
Primary wave 4 may be a complete regular contracting triangle.
Intermediate wave (E) may have ended in just 20 days, one short of a Fibonacci 21. E waves of triangles are often short and brief, and this one looks reasonably typical.
Within primary wave 5 downwards no second wave correction may move beyond the start of its first wave above 1,333.61. Any movement above this point would immediately invalidate this wave count and clearly confirm the main wave count.
A clear breach of the (B)-(D) trend line would provide confidence in this alternate wave count. Thereafter, full confirmation would come with price movement below 1,240.61.
While price continues to move sideways overall this wave count does not have a good fit. Sideways movement still looks much more like a typical B wave at this stage than a new downwards impulse. This wave count looks forced. I only publish it today because it expects a strong third wave downwards. Although this has a low probability, it is possible.
At 1,275 minute wave iii would reach 2.618 the length of minute wave i.
Minute wave iii should break below the lower edge of the pink base channel drawn about minute wave i and ii. If the lower pink trend line is breached that could be confirmation that a third wave is underway. Upwards corrections should find resistance at the upper pink trend line.
The truncated fifth wave for minuette wave (v) at the end of minute wave i significantly reduces the probability of this wave count.
This analysis is published about 08:00 p.m. EST.
Yesterday’s Elliott wave analysis expected a small triangle to end and be followed by a sharp upwards thrust. This is what happened, but the target at 1,330 has not yet been met.
Another sideways session and another small red doji candlestick still fits the wave count. However, with sideways movement lasting over two days now I am again considering an alternate idea published previously. It makes no difference to overall direction at the daily chart level, but it makes a difference to target calculation and short term expectations.
Yesterday’s analysis expected to see some downwards movement, from both the main and alternate hourly wave counts. This is what has happened. With a further 24 hours price action to analyse I now have more confidence in the main hourly wave count.
Yesterday’s analysis expected to see more choppy overlapping movement. Tuesday has ended with a small doji candlestick, which fits the expectations exactly.
The target at 1,297 was expected to be met within 24 hours. Price has moved higher as expected to 1,296.38, just 0.62 below the target.
Yesterday’s main wave count expected more downwards movement towards a short term target at 1,215.4 before a trend change. Price moved only slightly lower, reaching 1,218.60, before turning slowly upwards.
Last analysis expected a little more upwards movement towards a short term target at 1,210 before price turned lower. This is not what happened.
Last analysis stated that if Monday produced a red candlestick that the current fourth wave correction would be unlikely to be over.
Price has moved a little lower in a slow sideways moving day.
The wave count remains the same. I have two hourly charts for you today looking at two possible structures for the completion of this fourth wave.
Last analysis expected more downwards movement towards a target at 1,207 to 1,198. Price has moved lower, but so far is well short of the target.
I have two hourly wave counts for you today. I will use confirmation / invalidation points to work with these two wave counts today.