Ending a triangle as we end a year?

The cash S&P500 moved higher to open the week but essentially ran in place yesterday on anemic volume. With volume expected to be light over the next few sessions due to the festive holiday season we may have to wait until the New Year to get moving again.

If the contracting triangle scenario is complete then we have the daily chart marked as shown. The triangle would be wave “4” within a larger five wave impulse structure.

My next series of posts will explore the larger Elliott structures in the S&P500. I will begin with a discussion of the new yearly chart on New Year’s Day.

Weekly Chart Elliott Possibilities -OR- The Triangle Lives?

After an uptrending week with a lower close the previous week, this week’s weekly chart of the cash S&P500 index formed a downtrending price bar with a lower close. The upward price pulse from the recent 1406.10 low completed 1523.57 high and a downward pulse is underway from that point.

Two weekends’ ago I asked “Is wave “c” over at 1406?” My answer then to that rhetorical question was “I think the weekly technicals are saying “yes”, but first we will have to see if resistance can be broken at the 1490 level.” Well we broke above that area on the daily chart but were stymied by resistance at around 1500 (red and blue moving averages on today’s chart) on the weekly chart.

As you know I have been of the opinion that we are forming a corrective pattern from the July high. Furthermore; even though I have been showing completed Expanded Flat patterns in my latest daily chart postings, I continue to believe that a very viable alternative count is a Contracting Triangle from the July high, with the move down from 1576 to 1406 as wave “c” of that correction. The move up to the recent 1523.57 high may have been wave “d” and this week’s decline wave “e”. The market may now be starting to thrust out of that triangle. But is wave “d” over? If it is not, then of course wave “e” is not. And then, the market rally that would seem to be a thrust of a completed triangle will end up being just the last part of “d”. These possibilities are labeled on today’s chart.

It is important to appreciate the fact that no matter what the correct count is, any of the presented possibilities (to include the daily posting scenario) is that the market will move to all time highs before ever breaking 1406.10. My main reason for thinking that perhaps the “d” wave is not complete is that it did not make a Fibonacci relationship with wave “b”. Those possible Fib points are the horizontal dashed blue lines on the chart. Of course, wave “d” isn’t required to make such a ratio it’s just that they often do.

My next post will be Thursday morning. Enjoy the holiday.