AynCzubas
Short

4th Wave Triangle Nearing Completion

FX:SPX500   S&P 500 index of US listed shares
151 26 2
The contracting triangle has narrowed down to its final wave "e", which is itself a triangle. The "e" wave may be complete after two more small waves, down, then up, ranging between roughly 1973 and 1945. From somewhere in the middle of that range, a downward thrust should then begin, taking the index below 1900 and likely at least as far as 1840-1800 in a 5th wave.

Stop loss at 1995.4, as breach of this high would invalidate the bearish triangle count.
AynCzubas
a year ago
Updated Wave Count:
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AynCzubas
a year ago
Updated Wave Count: Is wave "e" ending with this last little thrust up?
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AynCzubas AynCzubas
a year ago
To venture a guess, wave "e" will peak at 1992.7/8
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AynCzubas
a year ago
Technically, wave "e" (if it was such) should not have gone above the wave "c" or "a" peaks (here, 1995.4 and 1993.6) in a valid contracting triangle. The fact that price has just gone to 2000 casts some doubt on the triangle structure, which has otherwise played nicely until now since the 1833 low.

There is one possible scenario that may be occurring that would still fit within the triangle view: if wave "e" is a triangle, its actual end would be where its own "e" wave completes. If the "e" wave ultimately terminates at or below the "c" wave peak of 1993.6, despite the highs and lows that its "a", "b", "c" and "d" waves reach before that point, it could still be considered valid.

I will be watching closely to see whether this is the case or something else is happening.
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AynCzubas AynCzubas
a year ago
For example: if this "e" structure were to maintain, it would imply its own post-triangle thrust measurement to drive price downward to the edge of the lower trendline of the larger triangle, setting up the larger thrust.
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AynCzubas AynCzubas
a year ago
The red dashed line is 1993.6, mentioned above as the peak of wave "c" of the larger triangle.
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AynCzubas AynCzubas
a year ago
It does now seem to be hitting a ceiling of resistance just under 1193.6. Let's see if this is the final peak of wave "e" and the beginning of the downward thrust.
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look4edge AynCzubas
a year ago
hi, appreciate your effort and good charts :)
however, i think diameteric neowave pattern could be developing here, if fed will hold the hike, rally up very likely
for diametric wave e potential up to around 2025, then f, g and after that another leg down, lets see

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AynCzubas look4edge
a year ago
Look4edge, if the index continues higher than 2000, I will be inclined to switch my view to this being a bullish triangular wave "B" of an ABC correction that would more likely be a 2nd wave than a 4th, given that the retracement has already crossed 50%.

I also think it will be interesting to see whether the critical juncture in the chart pattern arrives even before the Fed announces its intentions.
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AynCzubas AynCzubas
a year ago
I am still thinking this final "e" wave will end below 1933.6. I saw this phenomenon occur in the recent EURUSD bullish triangle which led to the rally to 1.17. It was a similar case of a triangular "e" wave which fell below the "c" wave of the larger triangle but still terminated within bounds. This is my updated count for S&P 500 at the moment:
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AynCzubas AynCzubas
a year ago
Having made a last little peak at 1993 before breaking down through the low of that wave (b) of "e", it looks like what I was suggesting is happening, but let's watch and see if this is "it".
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look4edge AynCzubas
a year ago
expanding triangle and ...
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AynCzubas look4edge
a year ago
Wow, it jumped to 2021.2, very nearly where you suggested it would. Good call.
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AynCzubas AynCzubas
a year ago
And that is exactly a .618 retracement of the drop from the 2137.7 high down to 1833.5. Looks more like a wave 2
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look4edge AynCzubas
a year ago
I would suggest diametric wave B Neely style, no impulse, wave f of it down just started, then final g up and terminal wave C down
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AynCzubas
a year ago
@Look4Edge made a very accurate forecast (see above) of potential for a next leg to rally up to 2025, and it did then rally up to 2021.2 within a few points of that. That was based on his assessment of the triangle as a Neowave-style diametric pattern. I didn't anticipate that, using traditional E.W. triangle rules.

It is very significant that the rally hit 2021.2, as that is exactly (within 1/10th of a point) the 61.8% retracement of the decline from the all-time high of 2137.1 to 1833.5. That Fib retracement is typically associated with 2nd waves, rather than 4th waves.

If the price had not immediately snapped back down below my aforementioned key level of 1936.6 and have been languishing there until now, I would be more inclined to change my label from 4th wave to 2nd wave for this whole correction since 1833.5. However, call me stubborn, but at the moment I still see allowable room for even this latest development to fit within the boundaries of a valid "e" wave of a 4th wave triangle if "e" is itself ending as a triangle which could still terminate below 1993.6.
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AynCzubas AynCzubas
a year ago
Error: I meant to say 1993.6, not 1936.6
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look4edge AynCzubas
a year ago
wave f played out to almost 1954, now wave g - weirdest wave in progress, hard to call target, then big C down
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look4edge AynCzubas
a year ago
possible f wave
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AynCzubas
a year ago
Following the post-Fed announcement peak of 2021.2, which I am labeling wave (a) of "e", there was an oscillating wave sequence which could validly be counted as a contracting triangle, terminating with a peak (e) of "e" at 1993.0 which was below the previously mentioned critical level of 1993.6 (the peak of wave "c" of the greater triangle originating from 1833.5). From 1993, a drop to the lower range of the larger triangle has occurred, and this decline appears to be an impulsive wave which has now been partially retraced. If this is the beginning of the downward thrust from the larger triangle, it should work its way down into the 1800s at minimum.
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look4edge AynCzubas
a year ago
cmon, such an orthodox structure, maybe labelling is ok (not sure timing), but imo not corelated to what happenning in low liquidity environment just now... market breath, sync, etc... traditional ew could be of limited usage
that are reasons why neowave is here, of course not perfect, but can handle some anomalies, like diametric waves f and g

i would expect according to Neely last wave g up and blast C down, i take your target, no problem :)
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AynCzubas look4edge
a year ago
If there is a return back above 1993 instead of continued decline, we will know more.
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look4edge AynCzubas
a year ago
i understand you think it is only theory, but diametrics is quite common, like 2008 spx low was neutral triangle, etc...
very weird waves f and g here

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AynCzubas look4edge
a year ago
Whether this or that: It's all theory until it becomes reality. I don't have any doubt that there are actual examples of wave patterns that Neely based his conclusions on. I just choose to assess it from my orthodox E.W. view as long as it can fit. So far, I don't see enough to invalidate my count, but I'm not closed to your viewpoint either.

Here is an example of what I saw in EURUSD. On July 17th, I called for a rally from a bullish triangle from 1.0818 to 1.18. What we finally saw was a rally to 1.17, which was close, on August 24th.

In that forecast, I labeled an example of what I considered an "e" wave that exceeded but then terminated within bounds of the preceding "c" wave. You can check it in the lower notes and up-close charts I added at the bottom of this posting:
Potential Bounce at 1.0818, Rally to 1.18 area in Wave C of 4
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AynCzubas AynCzubas
a year ago
Potential Bounce at 1.0818, Rally to 1.18 area in Wave C of 4
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AynCzubas AynCzubas
a year ago
You'll have to click it to go see the original posting with updates and notes
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