Large fourth waves are not only possible, they are documented, and they can lead to 5 = 3.
So with yesterdays invalidation of any upward diagonals, the downward count changes to the count below, with minor waves 1, 2, 3 and 4 complete, and minor wave 5 in progress. This is the Plan B count that was shown before and now becomes the 'main' count. But a key issue involved in this chart is whether the fourth wave should be as large as it is, and I committed to review various materials and find out if large fourth waves make any sense.
|Four of Five Minor Waves Lower in the SP500 Index|
Reviewing Mastering Elliot Wave by Glenn Neely, Chapter 5-14, 'Realistic Representations' does, in fact, show impulsions with large fourth waves relative to their second waves when the third wave is extended.
So, then the Elliott Wave Principle by Frost & Prechter was searched, and, in fact, Figure 80 on page 100 of the 2nd Ed, (which is the same figure as Figure 2-16 on Page 85 of the current 10th Ed), does in fact show a wave where the fourth wave measures much larger than the second wave. Using modern charting software, that wave is reproduced, below.
|The Wave 4 in the EWP which is very much larger than Wave 2|
You can see that the claimed fourth wave retraces 50 - 62% of the third wave. But in the Elliott Wave Principle, the next wave is cut off after only a very small portion of it, just like you see above, so it is very difficult to tell if a proper fifth wave was even made, or what occurred as a result. So, in order to check this out, the additional bars were added to the chart below.
As you can see, not only was a fifth wave new high made, but the extent of that fifth wave is such that wave 5 = 3. Personally, I take this to be a real warning sign for those expecting a quick rebound after a brief new low below wave 3, the August 24th low, and another indicator that a primary fourth wave might be in real danger.
Anyway, my commitment has been met, and I hope this information helps you in the days ahead.