Market Indexes: Major U.S. Equity Indexes closed lower
SPX Candle: Lower High, Lower Low, Lower Close - Trend Candle
FED Posture: Quantitative Tightening (QT)
Yesterday, we counted five waves down to a ((5)) = ((1)). That is not what's changing. Today, there was a brief three waves up, that crossed up over the upper channel down trend line, from the fifteen minute chart, shown yesterday, and then lower lows that did not, as yet, fill a gap on the hourly S&P500 chart shown below. From a time standpoint, that three waves up early this morning was simply too brief to be a whole correction. So, we called it an a wave up. Then there a down wave that appeared as a "three" which we called a b wave. Without filling the hourly gap, the market sported quite the rally, upwardly overlapped wave (i) down, again, and then gave a bunch of it back in the last hour.
Not to worry, we again advised readers on line and commenters, not to begin upward wave counts until or unless the prior wave ((4)) high was exceeded. It wasn't.
The problem was this: the lower lows of today, even if they are the lower b wave of a FLAT for a minuet second wave have bearish implications. I don't want them too. That's how they work.
Further today I was able to find a 38% Fibonacci ratio, in time, to the prior up wave sequence, that I counted as ((A)), ((B)), ((C)), up, for you in near real time, which makes it just long enough for the minute ((ii)) wave in terms of time. The lower lows for today ruled out many of the possible patterns that could have been considered yesterday. So, if you look along the top of the chart, you will see a timeline which provides 38.2% to the high, versus the length of the previous entire minute ((i)) diagonal down.
|S&P500 Cash Index - Hourly - Minute ((ii)) Confirmation|
Because the up wave as minute ((ii)) is 38.2% as long as the diagonal (see the 38.2% flag at the upper right), and because it made a near exact 62% retracement, it can be a valid second wave. We have fallen well out of the up channel for minute ((ii)), the minuet (b) wave of minute ((ii)) is broken lower, AND the EWO is currently making new hourly lows.
That likely means that after minuet (ii) completes upward, if it does, that a strong minuet wave (iii) will occur downwards. The target for minuet (ii) would be the prior wave iv. Again, there is no upward counting unless today's a wave high is exceeded.
Today, the only difference in the hourly chart above is I have changed the degree labels from what I used when working quickly to their actual Elliott Wave degrees as best I can tell at this point. Overall, I would expect the five minute waves ((i)) through ((v)) to add up to a Minor 1, or Minor A that will break the February and April, 2018 lows in the S&P500 and the Dow.
I know a lot of people were asking why the October low 'couldn't have just been the C wave of a running flat fourth wave'. This is more evidence why. It certainly doesn't have the beginnings of a look of 'five waves up'. Just the opposite. So, I hope the explanation I provided earlier at this LINK made sense to you.
Be careful out there, and have a good evening.