Elliott Wave Analysis: S&P500 Update
|Good day traders!
On stocks we have seen much action lately, but still higher prices on S&P500 and Dax. On E-mini there is unfolding a wedge pattern, knows as an Elliott ending diagonal that can be placed in a fifth wave. That’s a very powerful pattern that may cause a strong decline if wave four swing at 2551 is broken.
S&P500, 1H
An ending diagonal is a motive wave that occurs primarily in the wave 5 position. It can also appear in wave C as part of a A-B-C correction. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement. Ending diagonals consist out of five sub-waves, with each one having three minor legs. They also take on a shape within two converging trend lines(as seen on the chart). One part that is crucial for the ending diagonal pattern is that wave one and four overlap.
Here is also an example of the ending diagonal pattern:
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