Minimum Waves In Place For [4]

With today’s decline, we now have the minimum number of waves in place for the c-wave and completion of wave [4].  The only problem is that the c-wave is likely an ending diagonal, which does not provide a lot of confidence that it has indeed completed.

What we are now seeking is the signal that it has completed.  That would mean we are looking for a 5-wave rally back towards the region from which this diagonal began.  So, any 5-wave structure that takes us back north of 6000SPX would likely be our initial indication that wave [5] has begun.

In the meantime, as long as we remain below 6000SPX, and the market only provides corrective rallies, then this can continue to subdivide lower in a more protracted ending diagonal for the c-wave of [4].  But, for now, we have the minimum number of waves to consider it complete, and we should remain on our toes for a potential reversal.

The only problem is that we still have not even struck the pivot box below, so this would be a VERY shallow wave [4].  However, since wave [2] was rather large and deep, it would make sense for us to see a shallow wave [4] based upon Elliott’s theory of alternation between waves [2] and [4].

In summary, be on the lookout for a 5-wave rally back to the 6000SPX+ region to signal that wave [4] is done and wave [5] has likely begun.  Until then, this can subdivide lower in a choppy ED structure.