Below is the hourly chart of the cash S&P500 Index. By measurement, you can see with about 140 candles on the chart, the Elliott Wave Oscillator has now crossed down below the zero line and is likely indicating the fourth wave sequence, (iv), of the minute ((c)) wave. If you are new to this blog the 'double parentheses' in text are to be read as circle-c in the upper right of the chart below.
|S&P500 Cash Index - Hourly - Looking for Final Sequence|
Because every fourth wave at every degree of trend poses it's own set of challenges - which I have termed 'The Fourth Wave Conundrum', the question now becomes whether this fourth wave, (iv), will end as a 'running triangle' or as an 'expanded flat'. Today's waves downward ended at the 78.6% level of the b:3 wave upward, bolstering the case for the triangle.
If a triangle forms, it would be making the case that "the last wave sequence is dead ahead". But the triangle must form properly in every detail. In this case, the d:3 wave would likely be limited also to a 78.6% wave upward on the c:3 wave downward, and then the e:3 wave must cross down over wave (iii) to be corrective to it as a fourth wave.
The alternative is that the entire downward wave from b:3 is really an ending expanding diagonal in construction, but then a fifth wave down is needed to end the sequence as a 3-3-5 expanded flat wave. This would allow a deeper wave (iv), and better challenge the lower boundary of the Elliott parallel channel from wave (ii). I have no preference as to which occurs as long as the rules are followed. That includes that wave (iv) must not overlap wave (i), up, in the downward direction.
Further, if the b:3 wave is exceeded in the upward direction then we may have to again consider an ending diagonal.
This is just the nature of The Fourth Wave Conundrum, and it is why patience and flexibility are required to avoid getting turned around as best as possible. This is the true nature of alternates which the analyst must learn to appreciate and grapple with.
Have a good start to your evening,