medium · Elliott Wave Theory ewt-core
A bond market has been in a sustained downtrend (yields rising). The analyst identifies a clear five-wave impulse decline in bond prices. At the same time, the S&P $500 has completed a converging wedge in what appears to be a fifth-wave position.
What is the most likely intermarket implication?
- The divergence suggests the equity wave count is mislabeled.
- Bond prices will keep crashing lower while equities merely consolidate.
- A major trend reversal is approaching for both equities and bonds.
- The equity market will instead enter a sharp new Wave 3 extension to the upside.
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