New Cumulative $NYAD Highs

Market Outlook: Back in Minor 3
Market Indexes: New SP500 All-Time High, Not So Yet in DJIA, RUT, NDX
Today's Candle: Higher High, Higher Low, Higher Close

Some Elliott Wave web-sites have been calling for the end of the bull market. A major Elliott Wave service did not / was not counting the end of the bull market since Primary IV as a motive wave or typical Elliott Wave structure. Yesterday, we said our count had another wave up in it today. It did. It may have more.

To be objective, I was looking for Minor wave 4 to go immediately to the lower trend line of the channel, either in a double zigzag or barrier triangle. It did not, and I was incorrect. So, let's back up and look at a study we have shown before. That of the New York Stock Exchange Advance / Decline line. This one is weekly from the February 2016 low of Primary IV.

$NYAD Weekly

I have noted numerous times that as long as this index is making new highs, it is not likely that the market has topped yet. I have also noted that the most recent downward wave - no matter it's shape - was a corrective wave. I have also noted that new highs were not only possible, but likely. They did happen - quite a bit sooner than I anticipated.

So now, let's also use The Eight Fold Path Methodology to better define which wave we are in. First, as always, the first step in the process is to determine the time frame that provides 120 - 140 candles on the chart for the wave of interest. That time frame is the two-day chart - which currently has 125 to 127 candles for this wave. The chart is below.

S&P500 Two-Day Chart

Next referring to the position of the Elliott Wave Oscillator (EWO), it is clear where the low of the second wave is. And, it is clear where the low of the fourth wave is. They are circled on the zero line. It is also clear the EWO can be interpreted as being in the fifth wave up. It is green, and above the line, and on a divergence with price.

This count puts minute wave ((iv)) in the vicinity of the prior minuet wave (iv) - wave four of one lower degree. Next, we have drawn in the channel as best as possible. You'll see the current wave is not in a perfect channel, and so, we may still have Neely's wedge working.

And, we said yesterday, we are still working on a triple zigzag in the upward direction. Unfortunately, until we know more, we do not know if the triple zigzag is a potential expanding ending diagonal for wave minute ((v)) of wave Minor 3, or if it is just the minuet (b) wave of minute ((iv)) as a flat. Either of these are certainly possible.  Next, let's put the EMA-34 through the chart.

S&P500 Two-Day Chart with EMA-34

From the EMA-34 you can see that every numbered minute wave is on an opposite side of the EMA-34 for form and balance. So, this count is potentially correct. But, right now minute ((iv)) has only three waves down, and often, not always, fourth waves take a longer time than their second waves. So, the position we are showing for minute ((iv)) may only the minuet (a) wave of minute ((iv)), and this is the minuet (b) wave up.

Again, it is nearly impossible to tell - because of The Fourth Wave Conundrum - which happens at every degree of trend!

Two things are for certain. The first is that "at the present time" the upward triple zigzag is not the suggested length yet: it's fifth wave is too short for an expanding ending diagonal (megaphone). But, and I need to emphasize this, the final wave is not too short for just a triple zigzag. There is a small possibility it could have ended in a contracting diagonal fifth wave of c, this afternoon.

S&P500 Cash Index Hourly Chart & Potential Triple Zigzag

Ideally, according to the above hourly chart of the S&P500 Index, one would want the (z) wave, as currently shown, for (b) or wave v in the expanding diagonal to be longer than 2499 in order to meet the strict definition of an expanding ending diagonal - or megaphone.

The second thing that can be seen is the pattern does not have the right look for an expanding diagonal or megaphone. Normally, in an expanding diagonal, the fourth wave - or the second (x) in this case - would be longer in time than the first (x), which would be the second wave of such a megaphone pattern. So, even if the wave lengths should become correct, the time signature is not.

Bottom line: this could just be the (b) wave of minute ((iv)) to provide better alternation with the minute ((ii)) wave, when it is counted as a sharp and not as a flat. Either way, we are, right now, back in Minor 3.

Well, that's it for the night. You can see why Elliott Wave counting requires a lot of perseverance and the ability to face some uncertainties, because the way waves are inherently structured there are some times multiple possibilities at once. Let's see how it goes.

For now, have a very good evening!
TraderJoe