Three Waves Up, So far

The S&P 500 can currently be counted as a flat wave. This was predicted yesterday, and the (c) wave of the flat did occur overnight, and nearly into the close today. That flat wave is shown in the chart on the left, below.

SP500 & DJIA Cash Indexes - 15 Minutes - Flat Versus Zigzag

Please note in the internal count to (c) that all three internal sub-waves are shorter in price than (a) which helps maintain degree labeling, and all of wave iii is above a line that could be drawn from (b) to ii. Further, there is alternation in wave (c) such that wave ii is a brief sharp, and wave iv is a flat which is longer in time. The internal count of (c) is similar in both the S&P and in the Dow.

The Dow Jones Industrial Average, however, made a zigzag instead of a flat wave, as its (b) wave did not retrace the needed 90% like the S&P500 did. In fact, the (b) wave of the S&P made the slight new low which would invalidate any attempt to count impulsively upward. Further (a) wave in the S&P, because of the lower low, must have been only a three wave sequence, where in the Dow it was a five wave sequence.

The likely consequence of these patterns is that if the (a) wave is overlapped in the downward direction, it would be a warning that the upward correction is over - or is turning into a much more complicated pattern (the former is more likely). Why? Because the vth wave of the (c) wave of the correction in the S&P likely truncated this afternoon - whereas it did not in the Dow. On several attempts wave v tried to get through that .b wave high, and it just could not. That is not a good sign.

If you are not familiar with the differences between flats and zigzags, then study these charts, and it may help.

Have a good start to your evening.

TraderJoe