I am not really an E-wave person compared to the many other dedicated folks out there. And I find pivots far superior tool. That said, I like to dabble from time to time.
It strikes me that we have just recently completed and ideal E-wave up pattern from the 2/11/2016 low to the 6/8/2016 high, and then an ideal down pattern to the 6/27 low, making a complete ideal pattern. The upshot is that we could be in early stages of a completely new move.
First I will outline what I mean by "ideal pattern." Then we'll go back to the larger view for context.
This is just for fun, because the problem with E-wave is that there is always an alternative count. Whereas pivots caught the turn on 2/11, shifted back more long term bullish on stocks near 3/11+, caught the top on 6/9, and recently gave a near perfect turn most especially on INDU and VIX on the 6/27 low. I could go on and on.
First the labeling of the up portion.
W1 up
W2 down
W3 up that sub-divides; showing up portions, w1, w3, w5
W4 down
W5 up
Now in an ideal move, there will be certain percentage relationships in price and time on the various components. Often W5 will be 61% or 100% of W1. There it was an overshoot of 61% by a little bit for 3 days.
To be clear, this chart measures the move of W1 from the 2/11 low to 2/22 high then projects that move from the W4 low. 61% of that near exact was 211.35. 100% would have been 216.64.
Timing didn't work so well on this but I'll still show it for the idea. This chart adds the timing of W1 projected from W4 low. W1 was so fast that 61%-100% in time was 6/1-6/3. The top was closer to 200% in time. Of course everything depends on labeling the key low as 2/11 and not 1/20 which would give a arguably valid structure as well.
At the conclusion of an up portion, the ideal down move is ABC. A is the impulsive move down, B is the corrective move up, C down. C can be 100-161% of A.
A down
B up
C down to finish the entire pattern
In this case C was just a bit over 161% of A in price. To be clear, this measures the move from the 6/8 high to 6/16 low, and projects it from the 6/23 high.
Timing is again sloppy due to the speed of the move so I will skip it. Anyway, if this idea is right we are at the start of a new pattern. What might that be? Let's go back to the big picture for context. This idea is outlined in more detail here.
The larger map perspective (going to SPX cash chart here) is this.
W1 up
W2 down
W3 up that sub-divides
W4 down
W5 up, now ideally in process from the 2/2016 lows
Using the same price and time 61-100% projections of W1, I have already established an ideal target zone of about 2250-2500 SPX from 2017 Q2 to 2018 Q2 for the final bull market high.
The problems would happen if we don't get the "ideal" final relationships but a failure or blow-off. If W5 stopped at 38-50% of W1 then we have a failure move of 2080-2165 - already reached! A blow-off would be considerably higher. But rather than be too annoying let's stick with the ideal target zone.
Now I'm going to the weekly chart to show how that W5 on the monthly will play out. Ideally it will itself be a 5 wave pattern. See below!
Probably few are reading at this point but here we have, ideally:
SPX Monthly chart W5 up in process from 2/2016 low, heading to a high of 2250-2500 2017 Q2 to 2018 Q2.
SPX Weekly chart just did W1 and W2 up of that monthly W5; to follow W3.
SPY Daily chart full pattern W1 to W5 up then ABC down constituted W1 and W2 of the weekly; brand new pattern kicking off here.
If all this is correct then we are about to get the last best move of the bull market over the next year or two. This will mean a new 5 wave up pattern on the daily, that will comprise W3 up on the weekly, that is part of W5 on the monthly. Got all that?
If not keep it simple from my view back in March to stay on the bull side of stocks with INDU above 17048.