Review of Week

From the weekly chart, prices remained inside the up trend channel shown, and actually closed a bit higher on the week.

S&P500 Cash Index - Weekly

Of significance, as we noted earlier - with about 114 candles on the weekly chart - the Elliott Wave Oscillator has come back down to the level of about 10. (See The Eight Fold Path Method for why we need the number of candles to be near 120). Since the highest reading was over +200, all it had to do was get back down under the 20 level (10% x 200 = 20). It has done that and more, and may well indicate the fourth wave, Minor 4, being formed.

Of the major U.S. equity indexes, the only one which can not be interpreted as being in a triangle is the Dow Jones Industrial Average. So far, the S&P500, the RUT and the NASDAQ 1000 can still be in triangle shapes. The DOW might be interpreted as having made a double zigzag downward. It may yet attempt a third.

Smaller Triangle or Larger Triangle

There are almost always more than one way to interpret a triangle. In this version below, the 'smaller' version of the potential triangle is shown. We caution, up front, this version does not count as clearly on the intraday wave counts we have provided before. It is provided because there is a logical way to reach this conclusion.

S&P500 Cash Index - Daily - Smaller Potential Triangle

In the above version, one lowers the (b) to (d) trend line and concludes one is in the (e) wave now. This count would suggest the (e) would be relatively deeper. The EMA-34 runs through each of these waves, which is one of the factors that makes it viable for consideration.

However, the larger version of the triangle, the one that takes more time and moves price further sideways, assumes the (d) wave is not yet done, and would push the (b) to (d) trend line even higher first. It is shown below.

S&P500 Cash Index - Daily - Potential Larger Triangle

This larger triangle agrees best with the current intraday counts and suggests that we are only in sub-wave b, down, of (d) up. Other than intraday counting, and using symmetry there are not very good ways to distinguish the two patterns. This second pattern might wind up being the more symmetrical of the two.

Therefore, still being in The Fourth Wave Conundrum, we must still be patient, flexible and calm as we work our way through all the various wave possibilities of which these are only two.

Have a good weekend.
TraderJoe