|Election Rally in the SP500 - Do You Believe in Santa Claus?|
That fact that we have only four possible minor waves tells us that we are still in Intermediate wave (3). The waves would be described as an extended first wave, a short second wave, then a 3rd wave which is just under or slightly over 61.8% the length of wave 1.
So far waves 2 and 4 have a very nice pattern of alternation, with no higher high in wave 2, and definitely a higher high in wave 4. On this time scale of a two-hourly chart, wave 4 might still be expected to travel lower to cross the EMA-34 for form and balance. But, the blue box indicates that the lowest a wave 4 should travel would be about 2235 - to travel about the same net distance from 3, as 2 did from 1. The blue box is the size of wave 2, and it is positioned at the top of wave 3.
So far, we have a sharp for wave 2, and a flat for wave 4. Isn't that wonderful? Just remember, a FLAT could also start a double flat, or a flat-x-zigzag to make life difficult enough to create the time needed for the consolidation. It is also possible to consider the highest high as wave 3, and perhaps a triangle is even starting to form . Each of those structures would fit well in the fourth wave position. And there are many other variations, as well (triple flat, etc.)
But notice how high the EWO is. It's not even close to the zero line, yet. So perhaps - just perhaps - the correction needs more time. That is what I mean in my YouTube video, A Critique of Elliott Wave for Trading, that fourth waves are very difficult to predict in their entirety, and I have given it the name of the fourth wave conundrum.
So even though the EMA-34 has not been crossed yet, could the correction be over? Well, there are ways for it to go further sideways but not go much lower in price. Maybe the EMA-34 will catch-up to price, rather than the other way around.
Also, I want to note two things specifically. First, the DOW made a higher high today where the S&P500 did not. Secondly, by way of a specific invalidation target, wave 4 may not overlap wave 1 for an impulse count. There is no evidence that the market is not impulsing in this wave, yet.