I'm aware that Andre Gratian has presented a view of a fourth and fifth wave pattern for equities in his weekend update, and I think that this count may be consistent. I don't know if he counts the internal subwaves as I do here, and that's about the real reason why I wanted to present this. It's a count I've been mulling over the past several days. I think that the idea of a triangle in the equities markets has problems, which I notice other technicians also have pointed out. I don't want to wrangle with the details too much - here are just a couple of alternate suggestions. One is that we're seeing the small "b" wave of a flat for the 4th wave, with the "c" that would break under those trendlines I marked on the chart; followed by wave 5 up. I think that would cause the whole 4th wave to be "too large" though - unless the flat truncated .... or unless the flat formed a Major B wave pullback, setting the stage for a Major C wave upward that would either become Tony Caldaro's Primary B up, or "wave 2 up" as other Elliotticians believe. (This latter idea would mean that instead of waves 1,2,3 as I marked, it would be ABC. In that case, frankly - instead of simply replacing 1 with A, I'd place A where the "i" is, and place C where the "3" is.)
One might argue that if the count I marked on the chart below is right, then the 4th wave may already have completed and we are seeing some stage of the 5th wave already - either a diagonal triangle or an impulse. I think Andre's view of it would be better than that. I should have drawn another trendline, parallel to those I drew across the highs and under the lows, originating from the early March low, and that could form a support line too.
Yes, I became skeptical of the rally and suggested that we should be very cautious on this market. I still believe that. But when the market demonstrates that it may want to push to higher levels, that must be respected and it becomes a good idea to go with it, never against it. I haven't abandoned my bigger picture views that the market has lower levels to visit in the future. It's just a matter of when - in price and time - the market wants the rally to be finished first. Maybe this will be a time when the Bradley model showing high swing points in June and July will be right (check my posts under the "Cycles on Bradley model" label to see that). If so, then enjoy it while it lasts but just remember two things: (1) even the Bradley model doesn't say the turning dates must be highs or lows, they can invert and it's the date that matters; (2) that model shows the market declining substantially after July, into approximately October/November this year.
A few comments on the oil chart (WTIC) below as well - since the futures do not currently show a movement under Friday's candle bar, this suggests that we may not see a reversal from the symmetry and Fibonacci levels oil went to at the end of last week. There can be an alternative symmetry level above $67, and then there are Fibonacci levels at $72.80 and $78.21. Don't forget there remains a potential for oil to get to $81.69 or even $91.51. The $91.51 level would be very interesting because it's the 50% retrace to the "all-time" highs. (Still, check my posts under the "Oil" label for some additional views on oil - which do include bullish price targets based on point & figure charts, but also bearish considerations.) I don't really think that oil is ready to work on the next leg up to new highs, before a retest of its lows. Another risk is a diagonal triangle structure. So we'll continue to keep an eye on it, and I'll take a closer look at Elliott Wave count for it in several days.
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