|SP500 Diagonal C wave lower likely in Progress|
The reasons are quite simple. First, we had upward overlap of the wave now marked (a) in the above chart. Second, today's up wave was longer than yesterday's up wave, and that violates the principle of nested first & second waves. That is, in a 1-2-i-ii series of nested second waves, each succeeding second wave should be shorter than the previous. Why? that is the very definition of what the term degree means. A lower degree wave, i.e. wave ii, must be shorter than wave 2. Third, yesterday's up wave was only a 38.2% retracement. This favors a (b) wave more that it does a second wave. Fourth, we were able to count five-waves up to today's high, and fifth, the downward wave (a), (b) and (c) fit precisely in a zigzag channel, and most impulse waves do not form like this (i.e. there is no downward break of a base channel denoting an impulse wave).
Late in the afternoon, after the opening gap was not filled, we started a down wave which seems to count as a five-wave sequence, but it didn't go anywhere. So, it may be the beginning of a (b) wave lower.
So, if we have (a), (b), (c) down to minute i (circle i), we must allow that minute ii (circle ii) could be 62 - 88% of the entire new minute i (circle i) wave downward. Today's high is likely minuet (a), and the down movement at the end of the afternoon likely started minuet (b) downward to a 38 - 78% retrace of today's upward wave. This should be followed by a further (c) wave upward to minute ii (circle ii), higher.
After that, from a wave-counting perspective, downward movement should resume as another set of zigzags for minute iii (circle iii), lower.
Cheers! And best wishes in the volatility.