# Choppy Rallies and Choppy Declines

Since the S&P 500 (SPX) decline bottom made on 01/24/22 the moves up have been choppy, and the moves down have been choppy. An Elliott wave – Horizontal Triangle could be forming.  This structure was examined the 01/14/22 blog “Important Cycle Point – 01-14-22” and in  the 01/19/22 blog “Horizontal Triangle Update – 01-19-22.”

Horizontal Triangles  are sideways  corrective patterns that only form in the wave “four” position of motive waves and in the wave “B” or “X” position of corrective waves.  Horizontal Triangles are composed of five sub waves  each which subdivide into three waves  or a combinations of three waves.

The 15- minute SPX chart courtesy of Trading View illustrates  the presumed Horizontal Triangle.

In an ideal Horizontal Triangle, each successive sub wave is smaller in price and time to the prior sub wave.

On the 15- minute chart the presumed : Minuette wave (a) is  62 bars.

Minuette wave (b) is 38 bars.

Minuette wave (c) is 23 bars.

Not only is each successive wave smaller, but there are also Fibonacci relationships among  the sub waves.

The Fibonacci ratio of wave (b) to (a)  –  38/62  = .612.

The Fibonacci ratio of wave (c) to (b) –  23/38  = .605.

Both ratios are close to the Fibonacci Golden ratio of .618.

The most common Fibonacci price relationships within a Horizontal Triangle occur among alternate sub waves, for example wave (c) to (a) or (d) to (b).

The length of wave (c) so far is  140.26.  The length of wave (a) is  230.61.  A  ratio of 140.26/230.61 = .608, again close to the Fibonacci Golden ratio of .618.

An SPX move above the supposed wave (a) high at 4453.23 would invalidate the Horizontal Triangle count. However, if there’s only a marginal move above 4453.23 the move up from the bottom made on 01/24/22 could still be a correction of the downtrend that began on 01/04/22. A possible alternate count for the post 01/24/22 rally is  complex Double Zigzag.  If necessary this count will be examined in a future blog.

The prior blog on 01/26/22 noted the  post FOMC  announcement rally  peaked  just above a .382 retrace of the decline since the 01/04/22 all-time high.

If the SPX rallies significantly above 4453.23 and reaches 4500.00 this could improve the chances  of an SPX rally to a new all-time high.  If the SPX reaches 4500.00 a future blog will examine this scenario.

The most likely possibility has wave (d) and (e) of the Horizonal Triangle forming  on 01/31/22, then a subsequent post triangle thrust down terminating in the SPX 4198 to 4164 zone as noted in the 1/26/22 blog.

If this scenario plays out it could give us a chance to witness the completion of a textbook Elliott wave – Horizontal Triangle.