Expanding Elliott Wave Analysis

This wave structure is so stretched right now – as we are approaching the 2.00 extension – that I am thinking about expanding the standard Elliott Wave analysis to include a wave 5.5 for this type of extension.  (smile)

So, as we approach the 2.00 extension for just this wave segment, it is clear that the wave count is quite full.  But, no support has yet been broken.  While the 60-minute MACD is still displaying the warning sign of a negative divergence and has begun to roll over already, we will need to break the 6940/50SPX minor support region to set our sights on the bigger support represented by the blue wave iv box on the 5-minute chart.

Remember, the nature of the decline to that box will likely tell the story as to which is the more applicable count.  If we drop there in impulsive fashion, then we have to assume the (c) wave decline is in progress, with follow through below the lower box making it likely we are on our way to the 6175-6300SPX region.  However, if the decline to the blue wave iv support box is corrective, then it likely means we have one more rally to be seen to complete wave v of wave 1 in the c-wave, which will set us up for another major rally into the last half of the year – of course, after we see a wave 2 pullback.

So, despite this extension, nothing really changes in the bigger picture.