Surprising to hear? Well, if this is a true Intermediate wave (X) triangle then it points the way to the last ABC structure to peak. And it probably is almost finished tracing up "A".
But the banking index may be pointing the way. The banking index has excellent long term Elliott Waves. And it is on its own course. It often leads and lags the SPX greatly. So you really cannot correlate the two. And I have shown recently how I mapped it in some kind of Intermediate wave (3) (perhaps its really a Primary).
Regardless, I hypothesized that the banking index had a MAX retrace of 46.52 because this was where I had its wave (1) low marked and EW rules says wave 4 can never retrace into wave 1's price territory. Indeed it has so far obeyed this as the max retrace was 43.8 which is also just a hair above its 38% retrace mark from where I labeled wave (2) peak. This would be normal for a wave (4). So all is good so far.
When the banking index peaked so early in May I figured if the SPX went to 950 or above the banking index would surely violate my 46.52 maximum calculation. Well it hasn't. In fact the banking index may be forming a leading diagonal DOWN.
I put a chart up of the banking index's short term waves and determined that the banking index could plausibly NOT take out its own high even if the SPX went all the way to 988 finishing P2 top. This would keep a potential LEADING DIAGONAL in place. All of this is speculative but highly interesting and it cannot be ignored.
I like 988 as a P2 top. Why? Because everyone has their sights set on 1000. It would be just like the market to rip the rug out about 10-12 points shy of an obvious target.
EWI showed that daily sentiment is back up to a new high of 86% bullish. That is challenging the Oct 2007 top.