The decline in the SP500 Index continues apace. In fact, it is moving in a very well defined, negatively-sloping trading channel. Let's have a look. You'll see why I was unimpressed by yesterday's gain at the close.
I've put wave labels on this chart, as if I knew what I was doing. We'll see. I've always had trouble visualizing what a series of first and second waves looks like, but now I think it looks like this. The wave labeled 1 is subdivided by waves labelled i through v. Note that wave 2 is a .56 retracement of wave 1. Though waves 1 and 2 occurred within the span of little more than a day, I think wave 3 is far from complete after two full days. Thursday's moves defined another first wave, labelled as i, because I think it is at a single degree lower level of trend. FWIW, note that the retracements of waves 2 and ii are nearly identical at .56 and .57.
Continuing down the channel, there is another first-second wave sequence that I didn't bother to label. This is the beginning of wave iii of 3.
The reason I think that the waves labelled 1 and i are complete is that the noted retracements overlap subwaves i and 1, respectively. Since that kind of overlap within an impulse wave is forbidden per Elliott's rules, that means these retracements must be outside of the wave in question. In other words, these retracements must be second waves - the following waves at their respective levels, not sub-waves four within the indicated first waves.
The aging support level at 1140 is also indicated. It was pierced this afternoon. We'll have to wait until next week to see if this is a convincing break. If I'm right, and wave iii of 3 is unfolding, it should be very convincing indeed.
.
Sunday November 24, 2024 MaryEllen Uthlaut
6 hours ago
No comments:
Post a Comment