Now let’s look at the cash S&P500 on the monthly chart from an objective wave view:
Starting from the 2009 low of 666.79 (which was a 150 period low) which was identified as the last low on the next higher time frame (Quarterly chart):
1. H greater than 12H: November 2009.
2. L less than 7L: June 2010. This means that W.1 up ended at the 1219.8 high of April 2010.
3. H greater than 20H: November 2010. This means that W.2 down ended at the 1010.91 low of July 2010.
4. L less than 12L: October 2011. This means that W.3 up ended at the 1370.58 high of May 2011.
5. H greater than 33H: February 2012. This means that the W.4 low ended at the 1074.77 low of October 2011.
6. L less than 12L: Not yet recorded. This means that W.5 up is still underway.
Now we note two developments: 1) W.4 overlaps W.1, and 2) W.3 is the shortest when compared to waves 1 and 5. These two developments are perfectly permissible under the TD D-Wave system but NOT under classical Elliott Wave. In order to align the two systems I propose that under such a structure, the TD-Wave labeled W.4 be relabeled as an “x” wave and the waves labeled as W.1; W.2; and W.3 be relabeled as W.A; W.B; and W.C.
The chart shows both the D-Wave (1-2-3-4) and Elliott Wave (A-B-C-X) labels.
Under Elliott Wave theory there exist both Double (A-B-C-X-A-B-C) and Triple Three (A-B-C-X-A-B-C-X-A-B-C) patterns. Going forward, in order to keep the D-wave synched with the Elliott wave, the D-wave 5 must; in Elliott terms, be either an A-B-C or an A-B-C-X-A-B-C pattern. Does it? I’ll continue explore this idea using the weekly chart in my next posting.
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