The action over the last few days has met at least one expectation and that is that , so far at least, the index has not been able to cross the downward sloping line.
After some 20 plus years of involvement with EW, there are still a number of things that are above my pay grade – which, by the way, is zero given that this blog is free. As far as I am concerned there is a fairly distinct diagonal starting at about the beginning of march and lasting for about a month. Normally – that is 90% of the time - that would constitute a C wave in a simple A-B-C corrective structure. It is complete! There are exceptions however as shown below;
This one is going up rather than down but that is immaterial. Use your imagination. We are, in this scenario, at the 2 and about to embark on wave 3 of C. Notice that these diagonals as so called “impulse or motive” waves subdivide as 5-3-5-3-5 structures as opposed to 3-3-3-3-3. I simple cannot get that degree of detail, after the fact, to verify that that is indeed the case. Like I said, this is above my pay grade. Moreover this blog exists solely for entertainment purposes and should never be construed as giving advice.
Time will tell and keep your eye on the red line. Below is the somewhat less ambiguous situation with the S&P;