Rebound stronger than expected

The sub-wave iv rebound so far has a magnitude and a duration much larger and longer than what I have expected. However the form until this stage is still acceptable as a sub-wave iv.

Refer to the 6 months chart above, as long as sub-wave iv does not go higher than 8000 and overlaps sub-wave i, wave 5 remains as a normal wave consists of 5 sub-waves as shown below.


However, if the current sub-wave iv moves higher than 8000 and overlaps the sub-wave i the next possibility for wave 5 is an "Ending Diagonal" as shown below. Refer to 6 months chart, the sub-waves i, ii and iii after wave 4 form the wave 1 of (5) as shown below. The so called sub-wave iv (the current rebound wave) is the 2 of (5)

Ending Diagonal is a special type of wave found (not always) at the termination point of a larger pattern, indicating exhaustion of the larger movement. It usually takes a wedge shape within two converging lines with each sub-wave consists of 3 mini waves as shown. Ending Diagonal provides very precise entry point.

There is another possibility if the current run up refuses to stop, i.e the wave 5 has ended at sub-wave iii with sub-wave iv and v missing due to too strong a momentum change created by the US$1.2 trillion fund injection announced last wednesday to purchase Treasury Bonds and Mortgage Securities and the US$1 trillion fund announced yesterday to take over bad bank assets. Under this scenario, the current run up is the sub-wave i of wave 1 of Major B. I still think that this is unlikely.