Potential E-wave completion
Today’s the markets bounce of the wedge I posted in last weekends update. I also showed that this could be a larger B-wave of a A-B-C decline (check link above to review the larger picture). We appear to be at a very important inflection point. The B-wave would become invalidated with a break below the smaller B shown above (approx. 1309 on S&P 500).
Interestingly we got a reversal candle on the trendline itself and the wave volume of this leg is still decreasing with respect to previous waves (which happens often in triangles). On smaller time-frames, the C wave of this D wave also has less volume, confirming that the bear push is exhausting itself here.
Keep in mind, that E-waves often fail at the middle of the triangle, so a new high above 1375 is not necessary to complete this wave. Furthermore, Elliott Wave is highly subjective. Alternative counts (double ZZ) propose an immediate push through the trendline (see link above).
Bullish counts are more convoluted at this point, but instead of a B-wave we could be looking at a Leading Diagonal. Even if that were the case, the retacement should be deep, which favors at least a strong move to the downside.
