I favor what you call 5 at the top may be 3 with a sideways consolidation now followed by another pop up to 5. We’ll see.
mikeoakster
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Maybe, but... how do you count the sequence?
goodguy
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@mikeoakster, I have lost a lot of $ trying to trade on EWT alone. And maybe you don't. I see EWT just as a complex pattern recognition and for me anyway I try to coordinate it with channels, trend lines, Fib relationships, and a few indicators. My favorite indicator is the RSI 14. In this case there is a positive reversal that often leads to a higher high. Here is how I would personally count this one. But these always a guess. Notice wave 2 is complex and wave 4 simple. (alternation).
Please don't take this as I am saying you are wrong because I am not. Just trying to share how it looks to me.
goodguy
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@mikeoakster, The fib levels at the end are based on the size of wave 1 as 5 often has a Fib relationship to wave 1. Also not when there is a volume spike it often (but not always) occurs at lows. Have a great week.
mikeoakster
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@goodguy, I appreciate your comprehensive analysis. One more factor in favor of your count is the absence of a RSI divergence with price at the top, though a divergence is not mandatory...
My count refers to the futures index, in which I can't consider the elections' decline as a wave 2 of a lesser degree, as it would be bigger (in price and time) than the brexit's correction. In the cash index, however, the elections' selloff isn't there, making the correction smaller than the preceding one, thus validating your nested 1-2 count, which looks just fine to me.
I'm not sure what index is the right one to analyse, so I'm guessing it's the futures index as it contains the complete price action and is actually traded by people, therefore reflecting their emotions... but I really don't know.
In relation to trading, I don't use EW anymore as I find it too difficult to trade in real time (I can always find counts that expect a rally and counts that expect a decline, in whatever time frame). Nevertheless, I like to do this type of analysis and try to discover what is going on, so I keep making EW analysis on the S&P 500, but nothing more than that. For serious trading, I use my own set of rules to enter and exit the market, and for that, my tool box is composed only by Ichimoku and price action itself, nothing more.