Update: S&P futures have dropped 25+ points from 2013 to 1987 since this post. Our prediction was quite imminent.
If yesterday’s 3rd wave down is not yet complete (it’s possible it is) — I’m leaning towards having us in a 4th wave triangle right now. The rally overnight to 2017 was a big A — followed by an overnight drop of B and a C back up at the market open. Most of the day was another triangle (labeled blue) d — and then afternoon rally to E — that went over the top of C. If the market goes over 2017 — then market will likely go up.
We would normally expect the market to reverse after the E wave — but we rallied into the close and went as high as 2013 — just shy of E wave’s 2014.
The market really seems to be testing the upper side and going over. Let’s see what happens.
The fakeout occurred around noon — normally break out of a triangle, we expect a retest of the middle of that triangle — which we got around 1:15 — and then would expect it to fall –but instead, it only fell a little bit before rallying. So this is what happens when it breaks out of an inside triangle but then gives a head fake and continues the pattern of the larger triangle.
It looks like we may have experienced an Elliott Wave Triangle Pattern within a larger triangle today. Instead of a regular triangle, it looks like we are in an ascending triangle.