Above 78.6% - Yet Prior Wedge Worked Out Fine

As the result of considerable discussion on the blog, today, I am beginning to wonder if we aren't seeing an extension in 'time' of the Minor B wave, as below. 

SP500 Cash Index - 2 Hr - Minor B

The prior 2 Hr wedge worked out perfectly, and was predictive of a -175 down draft that broke the lower wedge line. However, price has retraced over 78.6%. It remains uncertain if price will make a new high or not.

The down draft in cash can be counted as a-b-c to minute ((x)), or possibly w-x-y to minute ((x)) in the futures.

Since price has retraced over 78.6% upwards, we 'might' be getting an additional extension whether as a truncation or not. Remember that triple zigzags, particularly in 'B' waves do have a tendency to truncate every now and then. If the wave doesn't truncate, that's fine. Either way, it might provide a way to make a regular old impulse down, rather than a larger diagonal downward.

Food for thought: the wave structure is by-no-means clear yet. But we do have to ask, "just why did that prior wedge work out so well?!". Yes, the start of it has not been exceeded yet in less time than it took to build. But, we also have to ask, "if an impulse down did not follow it, was it a 'true' diagonal?!!". The retrace legs were only 38% and 50% - that is short of the typical 62 - 81% retrace guidelines. So, maybe it was a wedge that was just the minute ((y)) wave.

Have a good start to the evening.

TraderJoe