I have changed my squiggle count as of today and I'll explain the EW logic behind it. I have changed the count from a [i] - [ii], (i)- (ii) down, to a 5 wave leading expanding diagonal - Minute [i] - that bottomed at 1560. For now we'll leave the [i] - [ii], (i)- (ii)count as a alternate. In any case, both counts nearly imply the same thing: That as soon as this countertrend rally is complete stocks should fall in a large Minute wave [iii] downward.
1. The large leading diagonal allows this current rally more flexibility in its course of price action and much more time to play out. If it was merely a subwave (ii) of [iii] , then time, price, and wave form would be immediately more limited. In fact if it is subwave (ii) of [iii], then a decline must start practically now.
2. The FTSE100 shows a very nicely structured (no overlap) 5 wave decline in the same time frame. One could think the FTSE needs more time and price to rebound in a proper wave [ii].
3. Gold and Bonds are fairly bearish in sentiment. They may need more time to rebound. Not knowing how the relationship in stocks will be over the short term, its better to be flexible at this point in the equity wave count.
4. An expanding leading diagonal occurs at major market tops. This would be one of those times where it makes perfect sense.
5. The subwaves adhere to an expanding leading diagonal: a) wave [ii] and [iv] both retraced [i] and [iii] respectively very deep 66-80%. b) waves [i] and [iv] overlapped in price. c) wave [iii] was longer than wave [i] and [v] was longer than [iii].
6. The bounce since the 1560 low seems to be correcting the entire decline since the 1687 top rather than just a subwave (ii) of [iii]. Therefore labeling 1560 as a Minute [i] low and this rebound Minute [ii] makes sense.