Overlaps

Others have counted the chart below of the New York Composite Index differently. I thought it would be instructive to look at it today.

$NYA - Weekly - Fifth Wave Failure

Some have counted this wave as wave 1, down in February, 2018, and wave 2, up to the October, 2018 high. I believe that wave count to be in error based on where almost all of the other major stock indexes made their highs. As far as I can tell, the October, 2018 high was the fifth failure wave in the $NYA.  It is what Ralph Nelson Elliott would call the "Orthodox high of the move", versus the "Nominal High of the move".

More importantly, look now at where the $NYA has overlapped on the way down.

$NYA - Weekly - Overlap on Minute ((x))

Some think that minute ((x)) was actually the high of Minor 1. If that was the case and they are calling for a "fifth wave up, because this is the fourth wave down", the overlap suggests they are clearly in error. There are other reasons to rule this out - as I have stated before - based on degree labeling. But the above overlap is yet another reason.

OK, that is water under the bridge, but here is another overlap.

$NYA - Daily - Overlap at 2

The daily chart of the $NYA shows two interesting features. The first is that there is clear overlap at wave Minor 2. So, those now labeling this as a fourth wave in this index are likely incorrect. But, this chart also shows something else of note. Namely, there is no overlap in the minute ((a)) wave down, as there is in the S&P500 cash index. Instead, there is a rather clear wave (iv) triangle!

So, in the first instance, there is now a clear case for a diagonal downward. Such a diagonal could either be expanding or contracting! The market is doing its level best to keep the uncertainty in the wave count. 

But, in the second instance if the current three-waves up somehow expand into "five waves up", then the next best count (best alternate) will be Minor 1 down at the October minute ((a)) location, down, and then five waves up for a "running flat" for Minor 2. 

$NYA - Daily - Alternate Running Flat

While I have diagrammed the alternate, above, the reason it is the alternate is that the internals of the minute ((a)) are not really clear, in this case, and they already contain one upward failure. In addition, there is no clear evidence of five-waves-up to minute ((c)) of Minor 2. But there could be. It could be the upward waves just aren't finished yet.

So as always patience, calm and flexibility are needed until the market sorts things out. It should be clear that any downward overlap of 11.40 on this chart before making a fourth and fifth wave higher would help clearly rule out the alternate.

Have a good rest of the weekend.
TraderJoe