|SP500 5-Minute Validated Expanding Diagonal Lower|
I called for the diagonal once the last blue a wave lower was made, today. The sharp blue b wave rally then followed, as did the new lower low which crossed the 2146 level - which I stated was the minimum length for the (v)th wave of the diagonal. Following these waves, which look like an A wave down, there were lower lows which presently look like a B wave flat, the c wave of which may rise tomorrow (yet to be seen).
The diagonal has all of the proper price relationships, in that wave (v) is longer than wave (iii), wave (iii) is longer than wave (i), wave (iv) is longer than wave (ii) but does not travel above it, wave (iv) overlaps wave (i), and there are all zigzag sequences.
This diagonal caused me to slightly re-evaluate my downward count to Intermediate (2). I found a way that may make it the more likely count, and that is shown below on the two-day S&P chart. A portion of this chart - the triangle - was also presented today in the live chat room.
|SP500 2-Day Chart of Intermediate (2) Lower|
If you remember that the Dow did make the new low at the location of the arrow, but the S&P truncated, then it is possible the five-wave sequence up in the first three says of September is the truncated end of the C wave of Intermediate (1).
Then, if we have the minor A wave down, the triangle can be a "barrier triangle" which hasn't broken lower yet for minor wave B. And, if that is the case, we may get a very small d wave down, which likely started today, followed by an even smaller e wave up - before the triangle dumps price lower.
That is the count that fits the current scenario the best, but, as always, triangles and diagonals (like the one in the first chart) are structures that must prove themselves.
So, it is still best in my opinion to remain flexible, calm and patient as the short-term whipsaws continue.