Relatively Simple

At this writing there is still no deal on whether the government will be open over the weekend or not. This is an important issue and may have an influence on whether prices go over the high again or not. Still, from a chart perspective our task is relatively simplified. We were able to count five-wave-up today with an extended first wave. So, the task now is to use The Principle of Equivalence to simply determine if we get three-waves up or five-waves up.

SPY Cash - 15 Minute - The Principle of Equivalence

I recommend using the SPY cash 15-min chart for this purpose, as above. The first item up for grabs is to see where the b/ii wave winds up on Monday morning. If price gets above and stays above the EMA-34, then it likely has more of a positive bias, temporarily.

The concern for a simple a,b,c wave, up, is that it would likely be shorter in time than the down wave. Not impossible, but then not the best corrective wave. One way to extend the time of the correction is to see if the c wave would become a diagonal, alternating with an a wave impulse. Another way to extend the time & frustration of a correction would be to make a double-zigzag. None of that is in evidence, yet.

If, on the other hand, this up wave in a channel becomes a five-wave sequence instead of remaining as a three then we need to question whether price will go over the high again as part of a larger diagonal that we showed at this LINK, before (see alternate red line). The down wave is just over 62%, and there is one way to count it as a-b-c down, but it is very non-proportional and is quite quick to be a larger diagonal second wave. Still, it might fit in a larger diagonal as a second wave.

So, just take it step-by-by step and see if we get a clear five-waves-up, Or, if this up wave remains a three or even a double zigzag. That's enough work to do over the holidays!

Have a good start to the evening and the weekend,

TraderJoe