This week’s top will depend on….The Minor wave 4 end point will determine if Minor wave 5 (and Intermediate wave A) ends this week. This corrective wave has been tremendous, but possibly too fast. Minor wave 3 thus far has already broken above the preliminary estimates for the end of Intermediate wave A. The initial Intermediate wave A locations were based on the idea Primary wave 2 would last 278 hours and gain a total of 307 points from the low of 4103 as outlined in this idea:
The movement thus far about the initial Intermediate wave A endpoint indicates the final market top is now above 4416 as opposed to around 4385. Intermediate wave A is also on pace to finish this week which is a week early. This earlier finish could point to the final market top occurring in early- to mid-December instead of the final week.
Minor wave 4 does not appear to have occurred last week. The hourly chart continued to achieve wave 3 signals until the final hour of trading on Friday (visible in the EW_3_V2 indicator at the bottom of the chart when the green bars stopped painting a light blue background). This appears to indicate the final 30 minutes on Friday began Minor wave 4 downward. This analysis will project Minor wave 4’s movement based on completed waves to this point. The new derivative model indicates likely movement zones based on historical data. The small green box is based on median move and duration data, while the yellow box contains the first through third of historical quartile data. The white box should contain the overall end point as it is comprised of all common historical movement. The percentage levels to the right are based on another model-type of relational wave data. The most specific quartile data are the pink levels with the top one at 38.01% being the first quartile, middle one of 47.67% as the median and the 72.04% level is the third quartile. The historical maximum wave 4 retracement is the red level at 84.72% and most likely will not come into play for the pending wave 4 down. The next slightly broader dataset are the light blue levels and the yellow levels are the broadest dataset used. Based on these models Monday should be somewhat of a downward moving day. I would speculate the low and end to Minor wave 4 occurs on Monday, but there is a chance it happens early Tuesday as well. Once Minor wave 4 is completed, Minor wave 5 should take the market up.
A general Elliott wave principle is use nearly all of the time is the length of a third wave cannot be shorter than waves 1 and 5. Right now Minor wave 1 was 16 hours and wave 2 was only 14. This would indicate Minor wave 5 must be 14 hours or less. This means the market top for this week should occur prior to the close on Wednesday and then the market will begin Intermediate wave B’s downward movement for the next week and change. In the event Minor wave 3 did not end on Friday, then the market will likely achieve another high greater than 4373.62 within the first hour or two on Monday and then begin Minor wave 4’s downward movement. A new high after the first hour of trading makes Minor wave 3 equal to or longer than Minor wave 1’s movement and no longer restricts the length of Minor wave 5.
Based on the accelerated pace and high achieved in Minor wave 3, Minor wave 5’s top this week likely wont go above 4420, but that will be determined better once Minor wave 4 has completed. Although a new high should occur this week, it does not appear this week will continue the red hot movement from last week.
METHODOLOGY:
I operate a modified wave theory composed of Dow Theory and Elliott Wave Theory. All data is determined from comparing current wave locations with historical wave relationships. The listed percentages are based on previous movement extensions and retracement quartiles of the data. There is too much data to list all points but overlap of the quartiles based on specific relationships tends to point to more likely targets. The light pink levels are based on most specific data, light blue is slightly broader, and yellow levels are the broader set of data used. A red level typically indicates maximum historical move for the current wave throughout the historical data.
Derivative models take the annotated waves from the above methodology and compare specific ratioed-relationships to predict future movement based off of smallest standard deviations in processed models. ***Currently in beta testing to determine efficacy***
