SPX/SPY Wave Tracking: From an A-B-C Read to a 1-2-3-4-5 Impulse
This is a chronological log of how my SPX/SPY count evolved over the course of about a week — from an initial complex A-B-C correction read, through several real-time updates, to the eventual reclassification into a clean 1-2-3-4-5 impulse. I'm publishing the full sequence, in order, so the process is visible, not just the final conclusion.
Each entry below reflects what I posted on X at the time, expanded here with a bit more context.
July 11 — Wave C (red) of 4 (black), starting down?
Original post: "Wave C (Red) of 4 (Black), maybe has started to the downside, after a nice ending diagonal of B (red), on Friday...."
At this point I was tracking a larger-degree wave 4 (black), with wave B (red) completing as an ending diagonal — a terminal structure typically found at the end of B-waves or 5th waves. Once that diagonal wrapped up, price started rolling over, which I read as the possible start of wave C (red) — the final leg down to complete wave 4 (black).
This was the starting hypothesis: a straightforward three-wave (A-B-C) correction, with C now getting underway.
July 14 — Wave 3 (orange) down?
Original post: "Wave 3 (orange) down?"
A few days later, the internal structure had refined itself. Zooming into the 5-minute chart, I could now see a smaller-degree 1-2-3-...-5 sequence forming inside what I'd been calling wave B — with green waves 1 through 5 visible, followed by an A-B-C move back up (orange wave 2), capped by a small ending diagonal.
The key question at this point: was the next leg down actually wave 3 (orange) — a full impulsive wave — rather than just another leg of a simple corrective C? The chart was starting to hint that the internal structure was more impulsive than corrective.
July 14 (later same day) — Ending diagonal of C of 2 complete? Wave 3 down starting soon?
Original post: "Ending diagonal of C of 2 up complete?. Wave 3 down starting soon?"
Later that same evening, the micro-structure clarified further: what looked like wave C of orange wave 2 had completed as its own ending diagonal (labeled i-ii-iii-iv-V on the chart), right at a resistance zone matching the earlier highs. That combination — diagonal completion + resistance rejection — was the first strong signal that wave 3 (down) could be starting very soon.
This is where the shift in thinking really began: instead of a simple corrective bounce, the up-move was behaving like a textbook orange wave 2, meaning the next leg down should be an impulsive wave 3, not just wave C of a correction.
July 15 — Multiple Liquidity Sweep (LS)
Original post: "Multiple Liquidity Sweep (LS)"
The following day, price returned to the same resistance zone (~7,610–7,625) not once but four separate times — each producing a liquidity sweep (LS1 through LS4/5) with wicks piercing the zone and closing back below it. This kind of repeated, multi-touch liquidity sweep at the same level is a strong technical signature: it shows the market repeatedly testing and rejecting the same price, consistent with a resistance zone that's absorbing liquidity before a reversal — exactly what you'd expect at the top of a wave 2.
July 17 — Reclassifying the count: Waves 1 and 2 are complete
Original post: "Everyone is waiting for Wave 4 to end so the SPX can continue its rally toward 8,000. But this chart suggests a different scenario. The price action over the past few months looks like the completion of Waves 1 and 2. If that's correct, the next move is likely a..."
This is where the count formally changed. Going back over the full multi-week chart, the wave B top (~7,631.59) and the wave 2 top (~7,631.43) landed millimetrically apart — with wave 2 topping just below the origin of wave 1, never overlapping it. That's the Elliott Wave overlap rule doing its job: it ruled out the simple A-B-C read entirely and confirmed this was a genuine 1-2 impulsive sequence instead.
Contrary to the popular narrative at the time — that the market was still finishing a corrective wave 4 before continuing its rally toward 8,000 — this chart pointed to a different scenario: waves 1 and 2 already complete, with wave 3 (down) the next expected move.
What changed, and why it matters
Looking back at this sequence, the shift wasn't a random change of mind — it was the accumulation of evidence across several days: an ending diagonal completing exactly where expected, repeated liquidity sweeps confirming the same resistance zone, and finally the overlap rule confirming that wave 2 could not have exceeded the origin of wave 1. Each new chart added one more piece of confirmation, until the full picture pointed clearly away from the original A-B-C read and toward a 1-2-3-4-5 impulsive structure.
This full back-and-forth — testing the count against price action, checking it against my own Fibonacci rules, and working through the logic with Claude along the way — is exactly the kind of process I described in my [methodology post]. I'll keep posting these updates in real time, warts and all, so the whole sequence stays visible.
Disclaimer: The content of this blog is for informational and educational purposes only and does not constitute investment advice. The ideas expressed are the author's personal opinions, shared for entertainment and learning purposes.
No comments:
Post a Comment