Today's overlap of last Thursday's high raises the possibility that the fifth wave of the five waves forming wave C (since early July) could unfold in a "diagonal triangle."
"An ending diagonal is a special type of wave that occurs primarily in the fifth wave position at time when the preceding move has gone 'too far too fast,' as Elliott put it."Per the "too far too fast" qualification helping the analyst discern a moment when a diagonal triangle more likely might form, could there be four words not involving foul language better suited to describe the market's advance since early July ... and then, too, from March '09 bottom?
So, we could be looking forward to a couple more weeks of misguided commentary in the mainstream citing the market's resiliency — its unwillingness to correct — as being evidence that, "we've turned the corner" and a "new bull market" has begun.
Indeed, it might take this long for the sort of short-term technical divergences I spoke of a few days ago to develop. This would take us right into August options expiration before a heavy dose of dire reality sets in during the two worst months historically in the stock market (September and October).
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