S&P 500 decline in a five-wave contracting pattern knows as leading diagonal from its all-time high. It's labelled i-ii-iii-iv-v in wave (a).
According to Elliot Wave theory, a three-wave correction follows every impulse move, that's the subsequent a-b-c zigzag move in SPX. The correction retraced more than 80% of the impulse, retested the upper boundary of the channel + daily demand zone.
Price is expected to resumed in the direction of the major impulse after a correction. The decline in wave (c) has the potential to take wave (a) low and beyond.
I will look for the break out of the parallel channel and green line for a conservative short entry while the red line is my short-term invalidation zone. What's your view on S&P 500? Let me know in the comment. Thanks, Veejahbee.
Personally I think the ABC started with the drop in early Sept and ended w/ the low on Sept 25th. Currently I think we still owe wave 5 (and maybe some more of 4) of a 12345 up.
vanfleetdaniel
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@isabellaalexandra, Exactly my thought. The larger 5 wave is not over yet but wave 4 might go deeper than most folks expect.
Veejahbee
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@isabellaalexandra, Thanks for your contribution. While the price is trading above wave "b" in blue low on the chart, the bulls still have a chance. Once that low is breached, then the bears have really taken control.
poister198
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High probability it will continue upwards within your defined channel all the way through 2020. Afterwards anything might happen, but the corrective C wave will not happen soon
Veejahbee
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@poister198, Anything is possible. Let's see how it plays out!
Personally I think the ABC started with the drop in early Sept and ended w/ the low on Sept 25th. Currently I think we still owe wave 5 (and maybe some more of 4) of a 12345 up.