The cash S&P500 index formed an “inside” price bar on Tuesday. Once again we had another technical “buy” signal on the daily chart as Monday’s new price low was not accompanied by a new low on the RSI. Yesterday I presented a weekly chart which showed three price pulses down from the October high of what I believe to be a “C” wave from the July high. Today I show a potential Elliott Wave count on the daily chart that would match the weekly.
This speculative count shows the “C” wave from October as being a corrective a’-b’-c’ pattern itself. In any such “a-b-c” correction the “c” wave must be a five. As depicted the five waves down from the 10/31 high are unfolding as an “Ending Diagonal” (also known as a “Terminal Impulse”) pattern. If this count has merit we should not break above Monday’s high before we fall to a new low.
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