What Type Of 5th Wave?

With the 1833ES level holding overnight, it provided us with the spring board for this current rally, which is likely a 5th wave rally.  The main question we have at this time is what is the extent and degree of this 5th wave.

As you can see on the 60 minute chart, the 1833ES level was the point at which the a=c correction could be seen as a running flat for the 4th wave, which would set our sights as high as the 1886ES region.  That would also be where the 5th wave would be equal to the 1st wave.

However, the main count we have been following would see this as simply an a-b-c move up to the 1862-1866ES region, which could complete an ending diagonal for this 5th wave, from which we would turn down hard, once completed.

So, for now, if you are interested in trading the index long, ideally, the 1845ES region should maintain support under both counts, and there should be no break down below 1838ES if we are indeed heading higher in the very immediate future. Once we begin the rally towards the 1860ES region, we can then see how it develops and the prudent thing would likely be to exit longs.  If the market is indeed within the stronger impulsive move higher to 1886, then it should blow through the 1866ES region in wave iii, only to come back and test it in wave iv in a corrective manner.  At that time, if you so wish, you can buy back in for the run to 1886ES.

But, based upon the primary and alternative counts up in this region, it does seem like we are completing a 5th wave, which, when completed, should set us up for another market decline back into the 1700’s.

 Elliott Wave Chart