The current impulsive move started on March 20th of 2020 after the Coronavirus crash. Primary Wave 1 was completed on October 29th of 2020, and Wave 3 has been in effect since that time. Primary Wave 3 is an extended wave, which means it is a long wave with enlarged lower degree corrections. The Intermediate Wave 3 of Primary Wave 3 is also an extended wave. The corrective move over the past two months is the Intermediate Wave 4 of Primary Wave 3. The next wave will be Intermediate Wave 5 or Primary Wave 3.
Analysis:
Since Primary Wave 3 is an extended wave it should be significantly longer than Primary Wave 1. Extended waves are typically more than 161.8 % the length of Wave 1. The November 22 high hardly broke above the 100 % extension level from the bottom of Primary Wave 2. This implies the current upward move is not yet complete. We can also conclude that Intermediate Wave 5 needs to be a strong upward impulse in order to reach the 161.8 extension level.
The current corrective move (Intermediate Wave 4) appears to have a WXY pattern. WXY patterns consist of any two ABC (W and Y) corrections joined together by a corrective move (X) in the opposite direction of W and Y. Wave W is a nearly sideways move and wave Y typically dips well below wave W. Typically Wave Y is a bit more than 161.8 % the length of wave W. Wave Y has already reached 161.8 % of Wave W (measured from the top of Wave X). Wave Y is appears to be an ABC zig zag pattern. We are currently in Wave C of this pattern, which looks like a 5-3-5-3-5 ending diagonal pattern. This suggest that the correction should be nearing its end.
There is another reason to conclude the current correction is nearly over. The Elliott Wave Principle requires the Wave 4 to remain above the top of Wave 1. The current correction (Intermediate Wave 4) needs to remain above 13910 to avoid dipping into the territory of Intermediate Wave 1. The closing price on Friday was around 14438, which is roughly 500 points above 13910. This does not leave much room for the market to fall.
Disclaimer:
This is analysis is not intended as investment advice. Its correctness also hinges on whether I correctly identified the Elliott Wave structures. I feel very confident that my analysis is correct, but it is always important to have some healthy doubt. I always try to reassess my analysis whenever the market does not behave as predicted. In this case, a drop bellow 13910 would prove that I incorrectly identified the Elliot Wave structures.