The SAME Three Waves Down

I have written about this before in the early days of the blog, and during the days when I was making YouTube videos. I am writing this post to re-emphasize the point and introduce some who may not have seen the earlier information. I specifically coined the term, "The Fourth Wave Conundrum" to recognize that when a down movement starts with only three-waves-down, then the number of Elliott wave possibilities explode (to thirteen or more).

During this time, people get "testy" with each other. You will recognize people who just "want to know when this up movement is over, and when the big down waves will begin". Everybody wants to "know what the count is." They don't care how to analyze the waves, they only know they are getting whipped around and their account may be getting trashed. So, they don't care about anything else except who is right, and who's count is going to make the agony end by price starting to trend again.

For that reason I show this schematic. It shows the very same three waves down in red, as they start only several of the possible patterns which can be part of a larger degree fourth wave. Assume the three red waves are from the October, 2018, all time high.

The Same Three Waves Start Multiple Elliott Wave Patterns

By now, if you have followed my work, you know that each of these patterns is possible from the start of three waves lower. So are the expanded flat, a truncated flat, an extended flat, a FLAT-X-Triangle, a FLAT-X-Zigzag, and, yes, even just a simple impulse up to new highs.

Your chances of determining the correct pattern by random chance are about 1 in 13, or less than an 8% chance. Those are not especially good odds. About the only thing I know that can 'help' in this problem is degree labeling and the break of upward sloping trend lines.

But, during this time, be especially kind to your Elliott analyst - especially if it is You! This is the true science of Elliott Wave as few others will take the time to describe to you. Do you have the patience for this? Does it help you in your trading or investing? Maybe so. Maybe not.

The market is just providing you with information. What you do with it and how you use it is totally up to you. Maybe the reason the current up wave is so hard to describe is that it's an "X" wave. They can be really tough. But so can a B:3 wave. And so can wave (ii) in a diagonal. And, clearly there are other possibilities.

This is what the Elliott Wave Principle means by (paraphrase) "sometimes the analyst just has to let the situation clear up".

As of this time, we have not broken the upward sloping trend line from the December 24th low through the March 8th low in the S&P500 cash index. Maybe we will soon. That would be an event to watch for. If it doesn't break, it will tell you "something" about the count.

Have a great rest of the weekend.

TraderJoe

P.S. As I said over the weekend, we have no right to assume upward movement has ended. We just have no "proof positive". We have not broken the lower channel line in the chart below. MotiveWave has no issue with the count shown, and the alternate is shown too.

S&P500 Cash Index - 4 HR - Needs Resolution

The longest correction in time may be the ((b)) wave. A second S&P500 15-minute chart was added below.

S&P500 Cash Index - 15-Minute - Potential Diagonal

Notice the declining AO within the wave. That's a good signature for a diagonal, but it would need to prove itself. Because we have not exceeded the time of (iii), yet, then (v) could go longer as a flat b wave and c wave up to follow, but does not need to.