There is an alternate wave count for the SPX that came into play on 7/27/18.
Most of the time after the conclusion of a Elliott wave Horizontal Triangle there is a powerful thrust in the direction of the main trend. The subsequent rally after the early May bottom has not been powerful. If there's not a powerful thrust after the Horizontal Triangle, then a Ending Diagonal Triangle (EDT) is the next most likely pattern.
There is a chance that wave (4) of the EDT could be comlete somewhere in the SPX 2780 - 2790 area. Bottom could come on 7/31/18 or 8/1/18.
I've been watching for the ascending wedge But I don't think the final rise is a three - it looks more like a five. Also in the final rise your ABC doesn't look right - the C wave is too short.
Note also that if you examine the daily MACD there should be declining divergence against price in a wedge, and that seems to have been invalidated.
One other option is that where you have wave (3) is actually wave (1) of a larger wedge formation, confirmed by higher highs in the daily RSI and MACD.
markrivest
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Hi @kunsan,
Thanks for your excellent points.
What I have illustrated as wave (3) of the EDT does look more like a five wave pattern than a three. I have learned through bitter experience that sometimes a three could like like a five and a five could look like a three. The markets sometimes will not have text book Elliott patterns. I have examine the sub waves of wave (3) down to the five minute level and and it sub divivides into a three wave pattern.
There are no rules regarding the size of waves relative to each other. Sometimes wave "C" could be 10% of wave "A". Bob Prechter once wrote, "size will vary form is constant".
You state that the daily MACD "should be" declining divergence against price in a wedge. The word should implies that it must happen. The are no rules regarding MACD divergences. There "could" be a divergence - it is not neccesary. This is another leason learned through bitter experience.
I have shown in a prior post that there is another way to count the SPX Horizontal Triangle from January 2018. That count is still a vaild alternative, we could know the answer as to which is the correct count by next week.
Mark
stinkbug
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Looks like a bearish rising wedge, if you look around this pattern is showing up in a lot of places. I've seen it MA, HD, Lowes, couple other big names.