SPX Truncated Ending Diagonal Triangle- posting date 10/2/16

SP:SPX   S&P 500 Index
168 8 9
My previous posts have noted that an Elliott wave Ending Diagonal Triangle ( EDT             ) may have been forming since the 2/11/16 bottom. This EDT             counts as complete as of the 9/22/16 peak at 2180.
Truncated 5th waves are when wave "5" fails to exceed the termination point of wave "3"

EDT's in a rising market are the most bearish Elliott wave pattern. They are termination waves and quickly retrace to their point of origin, which in this case is SPX             1810.
Truncated 5th waves in a rising market signal weakness and a sharp decline coming.

The combination of a Truncated 5th wave on an EDT             is a SUPER BEARISH SIGNAL!

The SPX             could decline to the mid-1700 area by late October or early November.

Hi markrivest, very interesting.
Would you recommend a short at the current price range?
markrivest mshinawi
Yes! If SPX down on the open that could be the high of the day.

+2 Reply
mshinawi markrivest
the condition happened on Monday, and followed by another bearish candle. I believe we can open a short now?
markrivest mshinawi
Today 10/4/16 the hourly SPX Stochastic entered the oversold zone. The SPX could be at or near a short term bottom.
The payroll report is out on 10/7/16. The SPX may rally into that report. Wait until after the payroll report on 10/7 to initiate short positions.

+1 Reply
truncated waves are fairly rare. in any case, the recent formation looks like a symmetrical triangle, so most likely whatever was in play prior to september, whether that was an impulse, a diagonal, and expanded flat, etc is still incomplete. just my .02.
+1 Reply
markrivest FractalTrader
Hi FractalTrader
Thanks for the comment. Yes Truncated waves are the exception not the rule. And yes there are alternatives, a Horizontal Triangle is the best alternative count.
The SPX should drop a lot on 10/3/16 and probably close near the low of the day. If that doe not happen it would be a big clue that something else is going on.

Very interesting idea. I am still very much a student and so do not have any feedback/criticisms/insights to offer, but it seems this view is contrary to the majority of the views on TV regarding SPX so I find it especially interesting. You have made some good calls in the past and a move this fast would likely scare the **** out of many people lol. Looking forward to seeing how this plays out, and to more of your work.
markrivest SharkbaitAl
Hi SharkbaitAl

Thanks for the comment and feed back as to what you have picked up on TV. Big market moves usually fool the majority.
Make a mental note about anything you read or hear about the stock market in the next two weeks. If there is a big move down
the knowledge of what the majority are saying will give great perspective for future moves in any market.

+2 Reply
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