|DJIA - 2 Day - A,B,C of Intermediate (1) Up of Primary V|
The completion of an A,B,C up for Intermediate (1) would mean that we are now in Intermediate (2) down which would need to form as Minor A, B, C, downward. That is one clear alternate. The chart below of the Hourly S&P500 Index shows the current partial count for a Minor A wave down as an expanding leading diagonal.
|SP500 Hourly Count for a Potential Minor A Wave Down of Intermediate (2)|
For this count, there are five minuet waves, (i) through (v) to the minute ((i)) wave of Minor A. Then, there are three minuet waves, (a) through (c) up to minute ((ii)) at just about a 78.6% retrace. And then, there are five minuet waves, (i) through (v), down to minute ((iii)) in a wave than is longer than minute ((i)).
Today's up wave may have completed or been part of the minute ((iv)) wave of such a diagonal, and it is already longer than minute ((ii)), as required by the rules in a potential expanding diagonal. If minute ((iv)) ended here, it would technically be ok, but it wouldn't have the right look, and it could easily go on to form another 78.6% retrace upward.
Then minute ((v)) would also need to form as five waves, and be longer in price than the minute ((iii)) wave.
But, diagonals are somewhat rare structures and we must keep that in mind.
So, countering the downward diagonal idea is the upward idea that wave C of the Dow's 2-day chart above has not completed yet. There are two ways that can happen.
In the first of these two, minute ((i)), ((ii)) and ((iii)) in the above chart are just minuet (a), (b) and (c) of minute ((a)) of a larger triangle, for a fourth wave.
|SP500 4-hour Chart - Wave 4 of C As a Triangle with Wave 5 Yet To Come|
Such a triangle could help equalize the net distances traveled by waves 2 and 4, because in a triangle the distance measured as "net" is from 3 to ((e)), not from 3 to ((a)), and a triangle could put wave ((e)) back inside the blue box.
While this is possible, it, relies on a triangle, and triangles are a bit more rare, too. But, also there would be two very sideways looking structures. Still, there would be a "clear indication" from a triangle that a "last wave up is dead ahead". This is the second alternate.
Finally, it would be possible just to assume that the March 27 low is the low of wave 4, as a-b-c. And while that would break some wave guidelines, it would not break any wave rules. All it would mean would be that wave 4 would be deeper than expected, and outside of the usuall guidelines for the Elliott Wave Oscillator in an impulse. Well, given how high up we are in the wave structure, such a case is not impossible. The simple zigzag downward for wave 4 would provide good alternation for the sideways wave 2, but, then, it would be shorter in time, than wave 2. Not impossible, but odd. And that is the third alternative.
So there are two of three alternates that spell higher prices, and one that spells lower prices first. At this point in time each alternate has it's advantages and it's disadvantages. But as I said, speaking for me only, I do not wish to get caught up on The Slope of Hope, waiting for a fourth wave that doesn't materialize properly, so I am letting the market tell me - day by day - which count is correct. I am personally neither bullish or bearish : just neutral, patient, observing and counting until the alternates fall by the wayside.
This is a clear example of The Fourth Wave Conundrum, as I have termed it, and is probably the single-most reason why most people dislike Elliott Wave work. Many people (me included) would probably just rather have the correct answer to the puzzle be apparent, rather than work for it. But the market has a different idea. That's just the nature of Elliott Wave work.
For now, have a good evening, and as alternates get killed by various invalidations, we will let you know here.