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SPX, COMPQ, and INDU Updates: Possible Reconciliation of Counts Across Markets

I’ve been trying to reconcile the counts across market, and may have found a solution tonight.  Each market gives a bit different appearance, and readers know I’ve referred back to RUT several times, which argues that the next low (assuming the market makes a new low) will most likely be a fifth wave and lead to a larger rally.  COMPQ seems to suggest the same thing.

A quick look at COMPQ first — if the wave labeled as blue 4 exceeds the invalidation level, I’ll consider switching it to the more bearish count of black 1 and 2.

Next, the INDU, which is much stronger in appearance than most other markets, and is giving the impression of a large triangle.

RUT isn’t shown, as I didn’t have time to update the chart, but readers can refer back a post or two for why I believe RUT’s correction was a fourth wave.

So how to reconcile all these markets with SPX? 

Well, how about an expanding ending diagonal fifth wave?  This seems to fit not only the pattern, but the current patterns and expectations of other markets as well.  As such, this is my preferred count for SPX, shown in blue below.

The more bearish count, currently labeled as the alternate, would view the present decline as a nest of 1’s and 2’s.  We’ll have to see if other markets invalidate their counts — for example, if INDU invalidates the triangle, then we can seriously consider the mega-bearish 1-2 count.

For contrast, here’s how the more bearish possibility would look.  Currently, this doesn’t reconcile as well with other markets, but we’ll keep watching to see how things unfold.  The appearances could all change tomorrow.  The alternate (iv) count still can’t be ruled out, and might end up marking the next low (I view it as quite unlikely that the market’s bottomed already — too much overlap in the wave).

In conclusion, the market still has a few questions to answer to bring more clarity to the structure, but I’m still favoring the idea that new lows will be seen, likely this week.  Further, given what’s in the charts at the moment, the ending diagonal currently reconciles all the markets fairly well.  Trade safe.
Morning open update — not sure how I missed this earlier, but an expanded flat looks quite possible now:


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