Assuming this is an ED in the S&P and my wave count to this moment is correct, I have a target range for the termination of the 5th wave between 2144-2183.4. That is assuming that the 4th wave's bottom has been reached already at about 2041.
From that level, the 5th wave should rise theoretically no higher than 2183.4 (otherwise it would leave the 3rd wave as the shortest among waves 1, 3 and 5, which would be invalid).
The low end of the range (2144) is estimated based on the expected minimum post-triangle thrust (treating the 4th wave as a potential triangle) and assuming the triangle's wave "e" bounces at the lower of the ED shown in my chart. It is interesting that the post- triangle thrust upward from the lower ED (at the present time or very soon) would bring price quite flush with the upper ED .
The 5th wave of an ED often overshoots the upper ED . It is also interesting to note that the high end of the target range (2183) closely aligns with the price level at which the lower and upper ED will converge in early July.
If you see my post from about two months ago entitled "Thought-provoking S&P Pattern?" (link below), you will notice that the longer-term implication is that we are due for a peak high around 4/20/2015 based on a hypothesis of a repeating cycle of time-equidistant peaks and troughs.
If I ventured a guess as to what fundamental news might "explain" such price action, I might suspect the final spike in relation to corporate reports turning out to be better than estimated after this weekend -- then followed by some unexpected .
We have the same idea about the recent action being an ED, and the time-cycle for the peaks since 2000 too. As for the rise from 2009 though, I'm inclined to look at the whole thing as a "B" wave with an ABC structure, with its internal "C" wave unfolding as a 5-wave impulse, the 5th wave of which (at least) might be an ED.
This could be the internals of how this ED could be counted?
This is long term chart of the S&P Composite. Looking at it makes me ponder if there is a little more upside into the end of President Obama's second term. From all time lows to 1929 highs = 52 years. Take 52 years and multiply it by 1.618 = 84.1 Add 84.1 to year 1932.6 months low = year 2016.7 months. We look at price, but time has fib relationships too. Next would come a huge correction 1000 or less, maybe even at the bottom of the channel to the 500's - 600's??? If this count is correct, it could offer a generational buy and hold, similar to 1932 lows. However ot's all just speculation and most likely I am 100% wrong.
I view the whole rise from the 2009 low as a corrective wave, and here is why:
Given that the long-term rise to the 2000 peak was impulsive....
Following that there was the crash down into the low of 2002, followed by the bull run up to the next peak in 2007, then the crash down into the 2009 low. I see that three-wave down-up-down sequence as a single "A" wave in total.
Following that, since 2009 we have seen the rise to the present all-time high (Actually though, if we adjust for inflation, it is now only at about the same level as the peak in 2000 (which then looks like a flat correction)). So, I see the present rise as the "B" wave. An "A" wave may be 3 or 5 waves, but a "B" wave can only be a 3-wave structure. And this rise since 2009 has that marked segmentation between 2010 and 2011 which looks likes an intermittent "B" wave and lends to the appearance of the whole rise from 2009 being a "B" wave. The final "C" segment of that "B" wave must be impulsive, and I think we are in the terminal stage of it now with the ED. After the ED terminates, I am expecting a "C" wave down of the same degree as the decline from 2000 and the rise from 2009.
I like that chart. That area that you have labeled after "(C)" through "W2", I look at all together as being an "A" and "B" and everything after that as a 5-wave "C" impulse. That is to say, I think the rise since 2009 has been a larger degree "B" wave in total, and the "(A)(B)(C)" from 2000-2009 was all together an "A" wave.
Right now, my opinion is that a structure that we could call a wave 5 has developed within the ED, arguably in three waves, and it has met the minimum expected criterion of exceeding the wave 3. We are seeing more pronounced downside movement thereafter. Even if wave 5 develops as a more complex three-wave structure and reaches upward again, I do not expect the S&P to go higher than about 2183 before a significant correction occurs.