Can we call the sideways consolidation in SNP500 a wave 4?

You can observe that the SNP500 Index is in a sideways move while the markets are waiting for the final results of the 2020 US Presidential election. From an Elliott Wave perspective, can this be called a wave 4? This is the kind of question that most traders ask because they will then make forecasts about where wave 5 can go. The Elliott Wave book, ‘Five Waves to Financial Freedom‘ has explained some easy to follow methods to compute the target for wave 5. So it is all a breeze, isn’t it?

This is a chart of the SNP500 index. The focus is on the recent sideways consolidation.
Is this sideways consolidation in the SNP500 index a wave 4

Successful traders focus on the possibilities of a trade

Generally speaking, traders tend to call a sideways move such as what is seen here in the SNP500 index as a corrective wave. And in this case, the sideways move has happened after the price has moved some distance off a significant low. Hence, you might be on the right path to consider whether this is a wave 4 in the index. However, the focus of any trader should be less on the forecasting aspect of the analysis. How can we trade this next should be your question and not whether this is a wave 4. And to answer this more important question, you should consider the alternate scenarios. Which scenario gives you the least risky trade, for example.