E-Mini SP500 Gyrations Review

Yesterday, the SP500 hit a crash bottom, and then reversed its direction and charge right back up where it once came from. This was a little too far for my liking, so I looked at my daily chart to find the peak, to the start of what could be a triangle.  I’m sure you know about the potential “Thrust” the 5th wave could make.

What is different is that we are in a much bigger diagonal, where the 5th wave itself can be another zigzag. Another zigzag to new record highs would then happen. The first zigzag sure looks like a flat, but the “D” wave could not be a better formed zigzag, pushing the SP500 to new record highs. 

If we look at the triangle as a whole, we can see that each zigzag in one direction, was completely retraced by a zigzag in the opposite direction.  Following the potential “D”wave top, the markets plunged into what looks like another zigzag crash, which I labelled as an “E” wave. 

This “E” wave has not been completely retraced, and I think it should still happen, as we were only 10 points or so away, from breaking a new record high this morning.  If the bulls are still in control, then the top trend line will not hold, as this present correction should find a bottom, and then reverse.  This mornings plunge was very steep, further making the case for a correction. 

Even if  this chart heads to a new low, we could also be in a “D” wave, as the entire triangle could be one wave too early.  I would love to see this as a triangle, because it can give us more certainty, that a much bigger correction is still to come.  

The new baseline is at the 2412 price level, which can get breached, but still soar back with a vengeance.  The SP500 is now getting close to breaking support, so we have to see what happens during the rest of the day.

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