It appears to me that the likely topping pattern we are witnessing could be part of a very significant top formation, to qualify as "generational top". Based on the my interpretation of Elliottwave Principle, the cycle that began back in 1929, probably formed a major top of wave 3 in 2000, and all the intervening price action since 2000 till August 2011 low could be contracting triangle wave 4.
If this is correct, then we might have just seen wave 5 top on 19th May 2015 high. The choppy price action could just be an early development of major cycle that could last several years with possible downside target retesting the 2009 low. Should this scenario play out then it could be very devastating and at the sometime offer us opportunities to benefit, if provided we are fully prepared to take advantage.
1. Potential ( ) close to breaking down.
2. Have several Fib confluence,
3. Momentum divergence at several degrees.
4. May 2015 top lines up with time symmetry (see chart below).
5. Several sectors started topping from mid 2014 with the main Index grinding higher due to strength in ever reducing number of strong stock making up the S&P500
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Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, do your own analysis for your trade requirement and ignore my views.
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Actually, what I thought was a triangle is now not the case and my wrong interpretation of that appears to be wrong. By the same implication, what I labelled as is also incorrect as indicated with current price making new high.
My count revised count is considering 2009 low as major wave with 2015 high as wave 3 of and 2016 low as wave 4 of . This implies that we are in final wave 5 of which is very mature. However, the problem with this count is the initial rally from 2009 low did not start with 5 waves (even though many think it did and we have running flat for retracement) and that is one of the reason for me to think we had a triangle.
So now, if 2009 low was the start of wave then we might have megaphone type of 3-3-3-3-3 structure as expanding ending diagonal. Will it get to 3200? I am not sure of that though in theory it is possible. For now I think 2900 -3000 as likely topping area and will look for evidence for that.
So for now as long as the May 2015 high holds I am happy with my counts and if it gets taken out then I will review accordingly.
Hope this helps.