Contrarian View via Elliott Wave Theory | SPX sharp move down
Using Elliott Wave Theory, I'm expecting a sharp move down in the coming days.
Rationale:
The current correction is a Flat Correction (3-3-5 wave sequence). Waves A and B of the Flat Correction completed as expected, Wave C is different as it is an Ending Diagonal Pattern. Ending Diagonal Patterns have different wave structures than Impulse Waves. Ending Diagonals have a 3-3-3-3-3 wave sequence. Of that sequence, when trendlines demonstrate expansion, Wave 4 always enters the price territory of Wave 1 (confirmed today). For the 5th and final decent downward, within this pattern, the decline can be over 100% of the distance completed in Wave A.
Rationale:
The current correction is a Flat Correction (3-3-5 wave sequence). Waves A and B of the Flat Correction completed as expected, Wave C is different as it is an Ending Diagonal Pattern. Ending Diagonal Patterns have different wave structures than Impulse Waves. Ending Diagonals have a 3-3-3-3-3 wave sequence. Of that sequence, when trendlines demonstrate expansion, Wave 4 always enters the price territory of Wave 1 (confirmed today). For the 5th and final decent downward, within this pattern, the decline can be over 100% of the distance completed in Wave A.
Comment:
Updated Charting - So far things are playing out as predicted!
Trade closed manually:
WRONG
"Rally" High Price Target
- Measurement of Ending Diagonal Wave 1 to Ending Diagonal Wave 2 multiplied by 2.618
- Applied result from Ending Diagonal Wave 3
- All Ending Diagonal Wave Corrections are ZigZags
- Within Ending Diagonal Wave 4, it appears we are turning to Wave 4 within the Wave C correction of Ending Diagonal Wave 4.
- Because overbought territory is near, I suspect a small pullback followed by the completion of Wave 5 within the Wave C correction of Ending Diagonal Wave 4.
- This sequence aligns with the measured distance from above
On my chart, the date of completion of Wave C within Ending Diagonal Wave 4 - or - Beginning of Wave 5 of the Ending Diagonal falls on January 16th (8 days) at $2604.04
End of Wave 5 (of Wave C within the Flat) and "Bottom" Price Target
- I measured from the price high of Wave A (within the Flat) to the price low of Wave A (within the Flat) and multiplied the distance by 1.618
- I applied the result to the beginning of Wave 1 of the Ending Diagonal
- Within an Ending Diagonal that is expanding -- Wave 3 is always longer than Wave 1, Wave 4 is always longer than Wave 2, and Wave 5 is always longer than Wave 3.
I don't have a date of completion of Wave C of the Flat, but the price target is $2258.11
Again - these may/may not hold.