Intermediate Price Pulse and a Trending Pattern

To quickly summarize, my premise is that an Expanding Triangle pattern is forming in the cash SP500 from the 2000 high. Wave 'D' of that pattern is itself a Zigzag pattern from the 2009 low and is about to complete. The Monthly chart showed that Wave 'C' of the Zigzag is a Trending pattern (1-2-3-4-5) where we appear to be towards the end of wave '5'.

On the Weekly chart (below) we can see the Intermediate Term Price Pulses that make up wave '5' of the Monthly chart which began in June 2012. Once again we have the expected five wave Trending pattern of alpha-beta-delta-x-y. Note that pulse 'y' is still forming. In these Trending patterns the Beta-x trendline is the one to watch.

And so .... when pulse 'y' (wave 5) completes on this time frame it will also mark the end of the fifth wave on the Medium time frame, Wave C on the Medium-Long time frame and wave D on the Long time frame. A very deep sell off is then expected to unfold.

Next time I will introduce the daily chart.

A Trending Pattern In the Medium Term Pulses

My last post showed a Zigzag pattern (alpha-beta-delta price pulses) forming on the quarterly chart with the delta pulse beginning at the July 2010 low. In wave pattern terms the Delta pulse is synonymous to the 'C' wave of the Zigzag and should itself be a Trending pattern (five waves making higher highs and higher lows).

The chart of the Medium Price Pulses (using monthly bars) reveals this trending pattern (alpha-beta-delta-x-y).

Unlike Elliott Wave, the third wave (delta) in a price pulse trending pattern CAN be the shortest when compared to alpha and y. In such cases my early research indicates that alpha and y will very often be similar in length as they are now.

Since the Medium pulses show that the Zigzag from the 2009 low is nearly complete (in pulse 5 of C) we must be wary that the entire 'D' wave of the expanding triangle from 2000 is also nearly complete. The 'y' pulse (or fifth) on the Medium Pulse chart should itself be a trending pattern on the Intermediate Price Pulse chart. I will take a look at that in my next posting.

The Medium-Long Price Pulses

In yesterday's posting I discussed the Expanding Triangle pattern seen in the Long Term Price Pulses. That work showed that wave 'D' of the triangle has been unfolding in the cash SP500 since the 2009 bottom. The last leg of the triangle, 'E', will end the pattern and move the market to what now seems like an absurdly low value. When will this 'E' wave begin? Why, when the 'D' wave ends of course!

Every leg of a triangle pattern is itself a corrective pattern. In the case of wave 'D' the Medium-long price pulses (as seen on the Quarterly chart) show it to be a Zigzag correction (an A-B-C pattern).

The implication is that the Zigzag, and wave 'D' of the Expanding Triangle, will end when the Delta pulse completes. The Delta pulse, or wave 'C' of the Zigzag, will itself be an Impulse pattern composed of five pulses. That pattern is revealed on the Monthly chart which I will show tomorrow.

Price Pulse Waves - The Big Picture

During my long break from posting I have continued to study/refine the Price Pulse methodology I have been working on. Usefully, I think that one can make use of the pulses to make wave counts. The wave patterns created are similar to those created via the Elliott Wave methodology but certainly not the same. For instance, an impulse wave in price pulse terms can have the third leg as the shortest when compared to waves one and five. Other differences will become apparent as we go along.

To start, here is the Long Term Price Pulse Chart as shown using Yearly bars on the SP500:

The analysis shows that a complete price pulse cycle has played out since the last major low prior to when this chart begins in the early 1980's. The complete cycle is composed of six pulses: alpha, beta, delta, x, y, and z. We are now in an alpha pulse from the 2009 low.

In wave terms, the fourth wave in an impulse pattern began at the 2000 high. Fourth waves are always corrective patterns and here we see a rare expanding triangle forming. The pulses correspond to the waves and so we are currently in wave 'D' of the triangle. The scary implication is that wave 'E' is next; a move that will take the SP500 below the lower trendline!

How close are we to completing the 'D' wave and starting the big decline? To answer that question we will need to explore the lower level charts. Next up: The Quarterly pulses.