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.
Comments
AynCzubas
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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.
look4edge
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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 :)
AynCzubas
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If there is a return back above 1993 instead of continued decline, we will know more.
look4edge
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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
AynCzubas
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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:
AynCzubas
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AynCzubas
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You'll have to click it to go see the original posting with updates and notes
AynCzubas
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@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.
AynCzubas
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Error: I meant to say 1993.6, not 1936.6
look4edge
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wave f played out to almost 1954, now wave g - weirdest wave in progress, hard to call target, then big C down