|SP500 30-Minutes Lower Low Today|
Although we did get a lower low today, the downward wave does not count well according to The Eight Fold Path Methodology. So, during live chat today, we indicated that there were two ways to count the down wave in progress: as A-B-C or as a-b-c-x-a-b-c; which the latter you will recognize as W-X-Y, and is shown on the above chart. We also pointed out that the down wave stopped at the prior wave iv in the diagonal. This suggests - as best we can tell right now - that only an overall "B" wave was formed lower, and the diagonal was just the "A" wave of minute i in a larger upward diagonal count that will make up Minor wave 5. So, there 'should' at some point be a C wave higher to end minute i.
Supporting this view; today I examined the Dow Jones Industrial Average, as below. And, two interesting things show up in the Dow. First, when trying to count a diagonal upward, one finds that the middle wave (marked at the end of the day on January 5th) is "too short". This means the Dow must not have been in a diagonal, but in a triangle.
|DJIA - 15 Minute - Not a Diagonal But a Triangle|
Also, you will note that, unlike the S&P 500 which did not, the Dow did make a new secondary low today. This prevents a count of i, ii up from the first low. Therefore, it appears as if wave c in the Dow count is the complex leg of a triangle, and higher highs might, in fact, be expected within this Minor 5th wave. First, the d & e legs of a triangle must finish properly, with the e leg crossing back down over the A wave. Then, there should be up movement out of the triangle.
This would allow the minor 5th wave to take on some length in relationship to it's minor wave 3, and that would be acceptable - provided that minor 5 does not become longer than minor 3.