There are always alternate Elliott wave counts. I've been illustrating an extended Elliott wave Impulse pattern up from the 03/23/20 bottom. This count is still valid but there is an alternative illustrated in todays post.
This pattern helps explain why a major SPX top may have been made at the 09/02/21 all-time high of 4545.85
Prior posts have noted that the SPX March 2009 to April 2010 rally appears to be Primary wave "1" of a impulse pattern that could terminate in 2021. There's usually a Fibonacci relationship between waves "one" and "five" of Elliott motive patterns.
The growth rate of Primary wave "1" was 82.9% multiplied by the Fibonacci ratio of .50 yields a growth rate of 41.45%.
An Elliott wave - Horizontal Triangle may have formed from February 2020 to October 2020. The calculations for fifth waves after Horizontal Triangles usually begin from the termination point, which in this case is the low point of wave (E).
A growth rate of 41.45% from 3233.94 targets SPX 4574 the all-time high on 09/02/21 was 4545. Considering the growth coordinates for this calculation are from more than ten years ago, 4545 is within leeway of the long-term target.
If this wave count is correct a multi-year bear market may begun.
The unwary bulls could soon get the shock of their lives.
To paraphrase the tag line from "Star Wars" "May the shorts be with you!"
The principle trend line of an Elliott triangle is the A-C line, not the C-E line. Redrawn, the E-wave is mostly outside that line, and does not look like an overshoot anymore. Proper FORM is a primary consideration for the Elliott Wave Principle, i.e. the "right look". Otherwise, we could draw strange structures almost anywhere.
markrivest
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@unbeldi,
What you've stated is not an Elliott wave rule. Please see page 50 Figure 1-44 of the 1998 edition of the "Elliott Wave Principle". It illustrates a nine-wave Horizontal Triangle in which
wave "A" is not touching the trendline. Additionally, please see page 222 Figure A-8 which illustrates the Dow Jones Industrial Average from 1921 to 1982. Note the Horizontal Triangle Wave "E"
which was was the 1982 bottom shows that wave "E" broke below the trendline. This is similar to a throw over in an Ending Diagonal Triangles.
unbeldi
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@markrivest, Well, that nine-wave structure is a very unusual case, and the A is not that far off from the trend line. With more time resolution, it can probably also be assigned in a different way.
A throw-over in E is not unusual at all, what is unusual is that almost the entire wave E is outside the triangle. With two very unusual formations, your assignment is very dubious.
markrivest
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@unbeldi,
The "A" is not far off from touching the trend line means it is not touching the trend line.
Unusual does not mean invalid. No Elliott wave are broken in either formation.
unbeldi
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@markrivest, It violates the first of all rules, proper look.
markrivest
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@unbeldi,
The "Right Look" is not a rule its a guideline. Please see Chapter 2: Guidelines of Wave Formation in "Elliott Wave Principle" page 75 - the "Right Look".
unbeldi
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@markrivest, Using the same principle of correction for your idea, I would simply assign a double-three, WXY, consisting of the COVID-zigzag (ABC) as W, an X wave for the recovery (ABC), and then simply an ABC flat to finish out wave 4.
I need to see what happens on 09/20/21. If there's a break of the 09/17/21 bottom it could give me enough evidence to make a projection.
The_Unwind
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As with your latest website post, highly recommended,
your market analysis is often beyond the grasp of mere humans like me.
Yet I attempt to read, and grasp every word written.