An Incomplete 4th Wave? ...

When the market broke below noted support yesterday afternoon, it opened the door to a 4th wave flat, as presented on the 60-minute chart.  The ideal target for the c-wave of that 4th wave was the 2702SPX region, wherein a=c in that structure.  However, the best the market was able to do today was c=.764*a, as it came up a bit short with a bottom so far at the 2709SPX level.

While this certainly may be enough to consider the 4th wave as complete, as my writing this update, we still do not have a completed 5 waves up off the low today to consider that we have begun the 5th wave run to the 2760SPX region.  So, it still leaves the door open to a final drop down to the 2702SPX region to complete a textbook 4th wave flat.

But, taking ourselves a bit beyond the micro count still suggests that as long as we hold over the 2700SPX region, the 2760SPX region still looms large as our next target.  However, I still think that, if we are able to make it to that target region, then we will only be completing the d-wave of the purple triangle, and we can still revisit the 2600SPX region to complete the e-wave of the triangle in June.

And, in taking ourselves even beyond the 60-minute chart, I posted my daily zoomed out chart last night in our trading room, and I have included in the update this evening.  As you can see, while I still do not think we have yet completed wave (4), the bigger pattern still suggests that we should begin the run over 3000 later this year.  Moreover, it would also suggest that we can strike our ideal target in the 3225SPX region by the middle of next year, and complete wave (5) of v of 3 off the 2009 market lows.

So, as we continue to move through this range-bound trading, I still think it may take another month or so until we begin our next major rally phase in earnest.

 

Avi Gilburt is founder of ElliottWaveTrader.net.