Alternate Count, Suggesting Wave 1 Complete, Wave 2 in Progress

FX:SPX500   S&P 500 index of US listed shares
371 13 2
The rally since the low of 1833, which I had originally counted as a 4th wave, has now risen high enough that it prompts me to consider that it might be a 2nd wave. A 4th wave typically only retraces .382-.5 of the preceding 3rd wave, but here this 3-wave             corrective structure has retraced more than 50% of the entire decline from the origin of wave 1 and is nearing the 61.8% mark -- which is more typical behavior of 2nd waves in general.

Now then, going back and examining more closely that sharp drop from the end of wave (2) down to 1833, I notice that the major section of it down to 1914 ends at a point roughly equal to 2.618 of the length of wave (1). It is typical for 3rd waves to be 1.618 the length of 1st waves, or even 2.618, 3.618, etc., within more powerful declines.

There is also divergence in the RSI reading which suggests that the above-mentioned 2.618 extension level is the extreme of the 3rd wave of that drop to 1833, and the subsequent (albeit very small) rise is the wave (4) followed by the final drop of wave (5) to 1833. That is because the RSI typically shows stronger for the 3rd wave relative to the 5th, even though the 5th wave exceeds the 3rd.

This could explain the upward depth of this corrective structure, which may be near completion. It would also suggest that wave 3 is imminent.

AynCzubas AynCzubas
I've seen many Elliotticians draw this strange wave 1 there.

To me it looks corrective still. Maybe a sharp ZZ down.
AynCzubas IvanLabrie
I still keep in mind an alternate view that the 1833 bottom was a 3rd wave, and this correction is a 4th. It is looking like a possible triangle which may have developed an A, B and C (or 1st part of C) already . We'll just have to see whether it keeps bouncing within this contracting pattern or drops down below 1901.6 more immediately.
I can't conceive a one-two-three using neowave rules, starting from the top.
With traditional EW, yes, for sure.
I'm biased towards ABC down, an X wave pending more upside completing the B perhaps.
AynCzubas IvanLabrie
I'm not sure that I understand what context you mean that in, as I don't know about Neowave. I can just say I view this top as the start of a very long C wave of the A wave of the 4th wave of Grand Supercycle degree which began in 2000. C wave would be a 5-wave impulse, so I am counting downward in numbers rather than letters.
AynCzubas AynCzubas
S&P 500 Elliott Wave Count 2000-2015
The way to find a reversal per neowave would be to have a very clear five wave structure end, and/or find a very sharp opposite direction directional move.
In this case, the move up is a correction since 2009, so you are better off using the sharp move down as guide to determine the end of the leg.
As for the structure, you couldn't have any retrace past 61.8, nor wave 2 taking more time than 1.25x wave 1, among other things, this would discard the EWI style counts I'm seeing lately.
But, ultimately it doesn't matter, since it's really hard to apply EW to actual trades, while waiting for confirmation using the multitude of rules and techniques outlined by neowave. The founder himself doesn't trade using EW!

What is your view on EURUSD btw?
AynCzubas IvanLabrie
Interesting. Yes, too much waiting for confirmation can make it easy to pass up good opportunities.

On the EURUSD, I think the drop to 1.0461 was the end of a 3rd wave of a post-triangle thrust from the triangle between 2009-2014. I believe the spike to above 1.17 was the C wave of the 4th wave up (a thrust up from the triangle B of that 4th wave).
I see.
Will be interesting to see what happens this month.
Good luck!
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