SPY Short: A look at Elliott Wave Counts and Fibonacci Extension

18 thg 10

Based on yesterday’s move where SPY opened with a new high, I have did a slight modification to the wave count such that I merged the previous wave 3 and wave 4 to become a single wave 3. Note that I do not really like this kind of action and shows bias on my end for preferred wave count. In order to do this, I will have to restudy Fibonacci relationships to ascertain whether it can be done.

Back to this idea itself.

As you can see, I’ve started the cycle wave 5 from 5th Aug 2024 low, and plotted 3 degrees of wave counts:
Highest Intermediate Blue Wave
Middle Minor Green Wave
Lowest Minute Purple Wave

All the waves counts end at the same place: yesterday’s (17th Oct 2024 session) opening high.
I’ve drawn 2 Fibonacci extension levels:
1. Green Fibonacci Level which is internal to Minor Wave 5: Extend Minute Wave 1 against the entire Minor Wave 5 Structure.
2. Purple Fibonacci Level which is a measure of Intermediate Wave 1 against Intermediate Wave 5.
Both Fibonacci levels shows convergence around 586.5 [Green: 586.45; Purple: 586.58] vs the opening high of 586.12. I am willing to accept this for a study of pre-opening shows that futures and CFDs was actually higher than our opening high, meaning target was hit during pre-market.

This is an important concept that an Elliott Waver must remember: the importance of movement of prices outside of regular trading hours (RTH) must be taken into consideration when counting waves and expecting targets.