August Stock Rally Climax?

The 08/22/24 blog “Buy the Rumor – Sell the News – 08/22/24” noted.

“On 08/23/24 FOMC – chairman Jerome Powell speaks at the annual Jackson Hole symposium.   Perhaps the Speech could trigger the Minute wave [v] final rally of the post 08/05/24 bull move”.  

There’s was a rally on Powell’s comments.  Could the presumed Minute wave [v] be complete?  If so a significant top may have been made. 

The 5 – minute S&P 500 (SPX)  chart courtesy of Trading View illustrates an interesting scenario that could develop.

About 90% of the time the fifth wave of a motive pattern exceeds the termination point of the third wave.   In this case the third wave was the Minute wave [iii] peak at 5,643.22  made on 08/22/24.  The SPX high on 08/23/24 was 5,641.82.  In Elliott wave theory when the fifth wave of a motive pattern fails to exceed the termination point of the third wave its called a truncated fifth wave. 

This may have happened, however note the subsequent decline appears to be a three-wave corrective move.   The next rally exceeded the  presumed Sub Minuette wave “b” peak and retraced more than 90% of the sessions decline.   Going into the weekend it appears the bulls still have considerable strength.

An Elliott wave – Ending Diagonal Triangle could be forming.   This pattern appears in the fifth wave position of motive patterns and terminate larger movements.

R.N. Elliott said Ending Diagonal Triangles appear after a market has moved too far too fast.  This perfectly describes what’s happen in the U.S. stock market since the 08/05/24 mini crash bottom. 

A significant top for U.S. stocks could be made on 08/26/24.

Side note, the SPX rally from late September 1986 to late August 1987 ended on 08/25/87.