Because the Dow made a new all time high, that made some things a lot easier at the moment. The first one of which is this count on the Dow for Intermediate (3). It looks like the rare expanded triangle was the right form for Minor 4.
|DJIA - Daily - Rare Expanding Triangle for Minor 4 in the Dow|
In an expanding triangle, there must be all zigzag sequences for each of four of the legs (remember we couldn't count the upward d leg as a potential diagonal in the Dow like we could in the S&P500), and wave b must be higher than wave 3, wave c must be lower than wave a, wave d must be higher than wave b, and wave e must be lower than wave c. All of that occurred, and the higher high as of today confirmed it.
With that as the case, it also helps clarify the S&P500 count, as well, to be that of a running triangle, as below.
|SP500 Daily - Running Triangle Synchronizes it with DJIA Count|
Remember in a "running triangle", wave b must make a higher high than wave 3, and all of the rest of the waves must contract which they do. But further, wave e, must close back under the high of wave 3 to be corrective to it, and it did. So, while ugly, and it's proportions were questioned, it doesn't violate any rules, and this seems the best way to "keep the peace" between the markets.
For those who have been tracking the upward wave since, below is the five-minute chart of the SP500 I was tracking in real time today.
|SP500 5-Minutes Three-Wave Sequences after 4?|
So, the start of the count proceeded in the channel shown with wave 2 as a sharp, and wave 4 as a Flat for alternation. Measurements showed the up wave to 3 made a 2.618 Fibonacci extension (to be accurate it was the higher b wave of 4 that did), and last night we said the wave didn't look complete. It wasn't.
And then, after the gap up (which seems like it is an "exhaustion gap" for a fifth wave), overlapping three-wave sequences began to appear in the count. We didn't ask them to. They just did. And the wave starting "riding the upper channel line" - a sign of "grinding", until it broke into the channel interior.
Within wave 5, we currently have (3) is less than (1), (4) is less than (2), wave (4) overlaps wave (1), and (5) is "currently" less than (3). In order to remain less than (3), wave (5) should not cross 2301.26 or there is some other count at work that is not a short term diagonal. (A larger B wave would be an option.) If the count holds, then a retrace to below wave 4 would be expected in less time than it took to make the 5th wave if the diagonal is an "ending" one.
We'll see. The daily chart does look like the typical "thrust" out of a triangle, and triangles often precede the last wave in the sequence.
There is also the concern on the daily chart that minor wave 5 should not become longer than minor 3, because minor 3 is shorter than minor 1, but we will deal with that in future posts.
For now, we want to note that the New York Advance / Decline line is still at all time highs, as below. There is no divergence in sight.
|NYAD Line Still at All Time Highs - No Divergence|
Keep that in mind, but also that it seems to grinding on the trend line, as well, and not impulsing away from it - at least not yet.
Lastly, it is worth noting that the two-daily S&P500 can now have Intermediate (4) downwardly overlap an Intermediate (1) wave by only 5 points as of today, and remain shorter than wave (2). That's a pretty slim margin. I have called it "Precision Flying" if that should happen. Let's see how it goes, but, as always, I am still flexible to say that we can still be in the impulse count up in the S&P, since we are likely so in the Dow count.
Well, that's about the extent of it, so far. Stay patient and flexible!