Monday, September 18, 2017

Failure?

Market Outlook: Minor 5 Complete versus Minor 3 Continuing (60 : 40)
Market Indexes: Most major U.S. equity futures closed higher after all-time highs in DJIA, SPX

Not me. The market may have failed. It was quite clear to me from the overnight prices that the diagonal sketched out for you on Friday was, in fact, a diagonal. It turned out to be a smaller leading diagonal, not an ending one. Thus, we opened with a small gap up. Not every diagonal is an ending one. (The alternative is that it was a triangle).

A continuation of the five-minute chart is shown below - just as shown in the real time chat room.

SP500 5-Minute Chart

You can see the end of Friday's diagonal on the left. But, then, when you start looking for the companion wave iv, for the gap wave iii, you are left with really only two choices. Either we have had a triangle, and a failure at the high, as shown by wave v? or everything since the high of iii is a very large wave iv, that missed downward overlap by 0.25 points!

If there was a failure at v? then that is the location of the z wave or of wave (v) of the hourly ending expanding diagonal shown over the weekend. In that case, wave v would have had a higher closing high, but not a higher intraday high.

And if it is wave four at the 14:30, low, then there should only be one more wave up.

The market can't have it both ways. It must pick a path. If there is a downward count started, it can only be counted as an expanding diagonal as shown in the above chart. But, then, lower lows are needed. And, if lower lows are obtained, then a wave iv becomes invalidated!

A worse situation occurred in the hourly NQ futures where a downward overlap of a previous first wave did occur.

The charts are getting quite messy and quite ugly. Even the Dow had a "double top" for some reason today. This does not seem like "standard impulsive" wave formation. Something quite different seems to be going on. And keep in mind, even though an upward gap opened up this morning, all of the gaps are to the down side. With today's movement in almost all indexes, there are no gaps above the market! That is some food for thought.

Have a good start to your evening!
TraderJoe




Sunday, September 17, 2017

Sunday Sentiments

Here are a few charts to have a look at this Sunday, intended to be more thought-provoking than necessarily definitive. And so there are a few questions to ask oneself.

Proprietary Sentiment Model

Why did the percent bullishness leap by more than four full points last week - in one week alone, and what does it mean for market direction? Is the possibility of a 'revenue neutral' tax reform plan really that bullish for individuals and companies? And has or hasn't the market fully discounted such a tax plan - if it happens - anyway? Isn't that what the supposed 'Trump Rally' was premised on?

NYSE McClellan Oscillator - Daily

Why is the McClellan Oscillator diverging with Friday's new all time high stock prices? While not a highly reliable indicator in itself, the pattern is certainly interesting at this point in time.

Daily Bullish Percentage of the S&P500

Why is the percent of stocks in verified bullish uptrends on point-and-figure charts double-diverging from Friday's all time high prices? This doesn't mean more stocks can't turn bullish, but the statistic is interesting at this point in time.

ES E-Mini S&P500 Commitment of Traders

Why are the number of long positions owned by "large speculative' market players - those that are usually "trend followers" at a new recent high? Meanwhile commercials have switched to net short.

Finally, people ask about the Wilshire 5000. Here is a chart below with a possible count that would synchronize the major indexes.

Wilshire 5000 Daily - Potential Expanding Diagonal
People see the recent August decline, and how it is a larger decline that overlaps other waves and  they tend to 'give up' on counting it. But the Wilshire is the only major index in which waves (2) and (4), as shown, do not have higher b waves and may be considered zigzags allowing the count of a potential expanding diagonal. So, in this case, waves (1), (3) and (5) would all be three-waves in nature.

Now, the information in the first four charts is just that. Information. The potential count in the last chart is an 'intentional effort' to synchronize some major indexes in time. Is this chart and it's message correct? Heck if I know today. But, it appears to be a valid way to count. And, the key point about the Wilshire - like many 2000, 3000 or 5000 stock indexes is that they will likely be "downwardly biased" by the weaker stocks in the index. Meaning, "near a top some stocks must rotate into a more weak position". This evidence can be seen in bullish percentage chart above. That's what would be the 'cause' of the (B) wave in the Wilshire.

Is a bearish view on U.S. equity markets correct at this exact point in time? Nothing is for certain. But the above information gives a rational person something to consider, instead of only letting their animal spirits roam. And, oh, yeah, there sure are a lot of down side gaps, and none currently above the market. All-in-all some warning signs to ponder and hopefully to keep one open-minded and flexible.

Have a good rest of the weekend.
TraderJoe

Saturday, September 16, 2017

Did The Bull Market Just End??

So, it can't be denied that the people I first learned anything about Elliott Wave Counting from, Robert Prechter and the folks over at Elliott Wave International, are publishing a count, below, in the Dow Jones Industrial Average which has an awful lot going for it. Since they taught me the most about counting waves, it would be almost criminal not to bring you their ideas, supplemented with a couple of my own.

Here is their overall count.

DJIA Three-Day Chart of Intermediate (5) with count as per suggestion of Elliott Wave International

To which, I will add my own thoughts that I have counted out for you in near real time the possibility of an Ending Expanding Diagonal in the Hourly DJIA and, now, with yesterday's move over 2499, the S&P500 Index, as well. The count from Minor 4 is on the chart below.

DJIA Daily - Count from Minor 4

To be fair, these counts have an awful lot going for them. Here are a Fibonacci-five important wave characteristics noted. 1) The high of the RSI-14 would be on Minor wave 3, and there is a divergence to Minor 5. 2) The lengths of the waves and lack of overlaps work out properly in this context, and in particular wave 5 is nearing the length of Wave 1, and within wave 5, minute wave ((v)) is approaching the length of minute wave ((i)). 3) You can see even just visually that within Minor 3, then minute ((iv)) is a smaller wave in point size than minute ((ii), and you can see the same is true within Minor 5. 4) Although the overall wave does not channel particularly well, there is no escaping the fact that Minor 5 channels beautifully. 5) There are two potential ending diagonals at two different degrees of trend : the hourly has the expanding diagonal shown in red, above, and the five-minute has the contracting diagonal shown in yesterday's post.

From a time perspective, Prechter has done studies showing that an end to the bull market in 2017 would provide a neat cycle top on several degrees of trend. We do find that timing work, at this point in time, quite compelling.

We want to be quite clear that we picked a pretty big bone with EWI when they did not recognize the Primary Vth wave as we did - because the DOW still hadn't channeled yet, on a time scale from 1982 which it has now.

But, there can be no doubt. Five waves up can indeed be counted. Sentiment is running hot as I have shown in previous posts.

So, besides the overall wave not channeling well, here are a Fibonacci three points detracting from this count. 1) the NYSE advance-decline line has recently made new highs; that is usually a sign a bull market is continuing, 2) while you can find alternation between the wave two's and four's, it is not as obvious in shape as it might be. Minor 2 has quite a high B wave, and Minor 4 has a much lower B wave. But, it is true in both of the cases of the fourth waves  that they are shorter in time than their second waves. That would be an odd curiosity, but it doesn't break any rules. It is actually possible to consider that as a valid form of alternation. And, finally, 3) the market has again just made new daily highs, without showing significant weakness.

The major issue I see is that if the current channel breaks down, or if what people propose as wave fours become longer in points than their companion wave two's, then the above count may be dead on the money.

Another minor irritant would be that the waves don't exactly follow The Eight Fold Path Method, but for the very last wave in the sequence - this high up in the order of waves - maybe it is actually indicative of the character of Primary V - to drag everyone into the long side of the market almost without respite or recourse, and not make the 38.2% retracements expected in the fourth waves.

For now, one can only speculate. The key point is I was indeed expecting five-waves up from the February 2016 low, and they may have now occurred. I do not want to ignore the possibility that it may be happening in front of our eyes, especially when diagonals have just been properly counted.

I know that a lot of you will also point to some particular index and point to problems with it. I do understand. Yet, Elliott's work was based on that average of the thirty stocks, and again I just ask that you consider that other averages and the leverage in the futures may be introducing complications due to the number of stocks in the index, the weighting of various sectors and / or the inclusion of derivative products.

So, remain flexible, as I currently am. As an experienced wave counter, I can see this possibility clearly, but I can also see a longer third wave scenario. And I would present that one if, and when, it becomes just a bit more clear - like if the current diagonals do not work out for some reason.

For now, have a very good weekend!
TraderJoe

Supplemental: I am adding this ES futures daily count to show that - counted in this fashion - there are no issues with overlaps or waves which are not the correct size.

ES Futures Daily Count - Can Agree with Dow Jones Count

Wave (iii) is longer than wave (i), and there are no overlaps of wave (iv) with any part of wave (i) or wave (ii). In this count all of wave (iii) is above a line from wave 4 to wave (ii). And, within wave (iii), there are no issues with the overlap of wave iv triangle with waves i or ii. Wave .i is the single first candle up, from wave (ii), and wave .ii is the 50% retrace of that candle shown as the wick. That also means there are no problems with overlap by wave .iv triangle.

Friday, September 15, 2017

Exact Accounting - Part 2

Market Outlook: Still in Minor 3, probably a (b) wave up.
Market Indexes: SP500, DJIA new All Time Highs
Today's Candle: Higher High, Higher Low, Higher Close

Yesterday, we stated we were likely making the last several wave of five waves up within ((C)) of the z wave of a triple zigzag. Today, in a rare special treat, I will provide the chart that was done "live and in real time" in the chat room. Five waves up; wave for wave, on the five-minute chart of the cash S&P500 Index in a contracting diagonal.

S&P500 Cash Index - 5 Minute Chart

There it is, and unmistakable. Wave (v) is shorter than wave (iii), wave (iii) is shorter than wave (i), wave (iv) is shorter than wave (ii) and overlaps wave (i), and each of the waves can be clearly counted in a zigzag.

Wave (ii) had just over a 68% retrace. Wave (iv) had a 50% retrace. The proportions and trend lines are near perfection. The S&P500 Index hit 2,500, and had a slight characteristic throw-over of the upper trend line.

The pattern is there. There is nothing to be made up. Nothing to be contrived. No alternates. No bent rules or guidelines. For this ending contracting diagonal to work, then wave (v) must remain shorter than wave (iii) on Monday, and the diagonal should be fully retraced - below the point marked 0 - in less time than it took to build it. IF the pattern should not work, it's not because the pattern isn't there. It's not because an analyst can't count waves. It's for some other reason, perhaps like a news story. The DOW can also be counted in a similar manner.

Again, what you do with the pattern is up to you. We do think it highly suspicious that the market ended on an all-time high when we have just had two back-to-back natural disasters. That's all we can say for now.

Until later, have a very nice start to your weekend.
TraderJoe



Thursday, September 14, 2017

An Exact Accounting

Market Outlook: Still in Minor 3, probably in a (b) wave higher
Market Indexes: Mixed, DJIA & SP500 new All-time High
Today's Candle: Doji

Here is an exact accounting, wave by wave on the hourly chart of the cash S&P500. It is the best I can provide. No wave has changed overall since the bottom. This morning's single wave down of -6 points was likely the C wave of a fourth wave - shown as (4) and in the vicinity of the prior wave 4.

S&P500 Index - Hourly - Cash

I hope the chart really speaks for itself. We are likely now making very, very small degree waves up from (4) to (5) of ((C)) of z at this time (today's new all time after the opening gap was closed makes that quite likely). The waves are getting so small and compressed up here it is truly getting difficult to count them. It is worth noting there is very nice alternation between waves (4) and wave (2) in the current ((C)) wave of z, up.

Hope this helps, and do have a good start to the evening.
TraderJoe

Wednesday, September 13, 2017

The Dreaded Megaphone Pattern

Market Outlook: Still in Minor 3
Market Indexes: Major Equity Indexes eeked out gains, except transports and utilities
Today's Candle: Higher Low, Higher High, Higher Close

I am pretty much going to let this chart speak for itself. Because, in the Dow Jones Industrial Average cash chart, a wave (v) is now longer than a wave (iii), and wave (iv) is longer than wave (ii), and wave (iii) is longer than wave (i), with wave (iv) overlapping wave (i), but not traveling beyond the low of wave (ii), with all three-wave sequences, then the pattern of an expanding diagonal - or megaphone - may be seen.

This one even has trend lines that look the part! In other words, the wave pattern almost has exactly the right look. If wave (iv) took a little longer in time than wave (ii), it would be perfect.


DJIA Cash - Hourly - Triple Zigzag or Expanding Diagonal (Megaphone)

There is no doubt that the above structure - as shown in black - is a triple zigzag. The issue is this: usually - most often - ending expanding diagonals usually occur 'over' their wave ((iii)). This one occurs inside it's wave ((iii)). So, there are three possibilities now. First, triple zigzag B wave. Second, ending diagonal. Third, leading diagonal. And, usually, the fifth wave (v) of an ending diagonal almost always occurs over it's wave ((iii)).

The pattern is there. The question is what to do with it. We'll leave that up to you. We will note that the ES futures are right up against their upper daily Bollinger Band, but the slow stochastics are now embedded for the third day.

The pattern of the EWO is quite amazing; the peak of wave z, is taller than the peak of wave y, which is taller than the peak of wave w. And the trough of wave (iv) is lower than the trough of wave (ii). This is the usual and customary pattern of an expanding diagonal on any time scale.

The only thing we can say is that if wave (v) were to conclude above the high of wave ((iii)), and there is a quick retrace, then the ending diagonal pattern gains considerable credibility. For this to happen, the downward wave must travel below the start of the diagonal at ((iv)). If this does not occur, then the pattern is either the B wave or a leading diagonal.

Even as I write that last sentence, having a leading diagonal at an all time high in the market makes me gulp, gasp, and shake my head, tsk, tsk. But, I've been fooled before. Let's see how it goes.

Have a good evening.
TraderJoe


Tuesday, September 12, 2017

New Cumulative $NYAD Highs

Market Outlook: Back in Minor 3
Market Indexes: New SP500 All-Time High, Not So Yet in DJIA, RUT, NDX
Today's Candle: Higher High, Higher Low, Higher Close

Some Elliott Wave web-sites have been calling for the end of the bull market. A major Elliott Wave service did not / was not counting the end of the bull market since Primary IV as a motive wave or typical Elliott Wave structure. Yesterday, we said our count had another wave up in it today. It did. It may have more.

To be objective, I was looking for Minor wave 4 to go immediately to the lower trend line of the channel, either in a double zigzag or barrier triangle. It did not, and I was incorrect. So, let's back up and look at a study we have shown before. That of the New York Stock Exchange Advance / Decline line. This one is weekly from the February 2016 low of Primary IV.

$NYAD Weekly

I have noted numerous times that as long as this index is making new highs, it is not likely that the market has topped yet. I have also noted that the most recent downward wave - no matter it's shape - was a corrective wave. I have also noted that new highs were not only possible, but likely. They did happen - quite a bit sooner than I anticipated.

So now, let's also use The Eight Fold Path Methodology to better define which wave we are in. First, as always, the first step in the process is to determine the time frame that provides 120 - 140 candles on the chart for the wave of interest. That time frame is the two-day chart - which currently has 125 to 127 candles for this wave. The chart is below.

S&P500 Two-Day Chart

Next referring to the position of the Elliott Wave Oscillator (EWO), it is clear where the low of the second wave is. And, it is clear where the low of the fourth wave is. They are circled on the zero line. It is also clear the EWO can be interpreted as being in the fifth wave up. It is green, and above the line, and on a divergence with price.

This count puts minute wave ((iv)) in the vicinity of the prior minuet wave (iv) - wave four of one lower degree. Next, we have drawn in the channel as best as possible. You'll see the current wave is not in a perfect channel, and so, we may still have Neely's wedge working.

And, we said yesterday, we are still working on a triple zigzag in the upward direction. Unfortunately, until we know more, we do not know if the triple zigzag is a potential expanding ending diagonal for wave minute ((v)) of wave Minor 3, or if it is just the minuet (b) wave of minute ((iv)) as a flat. Either of these are certainly possible.  Next, let's put the EMA-34 through the chart.

S&P500 Two-Day Chart with EMA-34

From the EMA-34 you can see that every numbered minute wave is on an opposite side of the EMA-34 for form and balance. So, this count is potentially correct. But, right now minute ((iv)) has only three waves down, and often, not always, fourth waves take a longer time than their second waves. So, the position we are showing for minute ((iv)) may only the minuet (a) wave of minute ((iv)), and this is the minuet (b) wave up.

Again, it is nearly impossible to tell - because of The Fourth Wave Conundrum - which happens at every degree of trend!

Two things are for certain. The first is that "at the present time" the upward triple zigzag is not the suggested length yet: it's fifth wave is too short for an expanding ending diagonal (megaphone). But, and I need to emphasize this, the final wave is not too short for just a triple zigzag. There is a small possibility it could have ended in a contracting diagonal fifth wave of c, this afternoon.


S&P500 Cash Index Hourly Chart & Potential Triple Zigzag


Ideally, according to the above hourly chart of the S&P500 Index, one would want the (z) wave, as currently shown, for (b) or wave v in the expanding diagonal to be longer than 2499 in order to meet the strict definition of an expanding ending diagonal - or megaphone.

The second thing that can be seen is the pattern does not have the right look for an expanding diagonal or megaphone. Normally, in an expanding diagonal, the fourth wave - or the second (x) in this case - would be longer in time than the first (x), which would be the second wave of such a megaphone pattern. So, even if the wave lengths should become correct, the time signature is not.

Bottom line: this could just be the (b) wave of minute ((iv)) to provide better alternation with the minute ((ii)) wave, when it is counted as a sharp and not as a flat. Either way, we are, right now, back in Minor 3.

Well, that's it for the night. You can see why Elliott Wave counting requires a lot of perseverance and the ability to face some uncertainties, because the way waves are inherently structured there are some times multiple possibilities at once. Let's see how it goes.

For now, have a very good evening!
TraderJoe









Monday, September 11, 2017

Some new all-time highs, Some not

Market Outlook: Still in Minor 4
Market Indexes: ES Futures, SPY new all time highs; SP500, and DJIA not.
Today's Candle: Higher High, Higher Low, Higher Close

Today's hurricane relief rally produced some new all-time highs as listed above. The ES S&P500 Index futures made a new high - just by one tick; the cash market did not. This tends to limit the number of possibilities going forward. First, let's look at the four-hourly chart of the ES futures.

ES Four-Hour Futures

On the above chart, you can see the marginal new high. The primary purpose of the day's action was to close the gap from September 1st - shown by black circle on the chart. This was accomplished by opening the gap up this morning shown by the red circle on the chart. As we stated earlier, gaps on the futures tend to close more quickly than those on cash. So, now, we have no gaps above in the futures market, and only gaps in the downward direction on the futures chart.

Because of overlaps and the lengths of the waves in the futures at the current time - as well as real time counts from the chat room - we can only claim that the upward wave counts as a triple zigzag, upward. Keep in mind  that once a triple zigzag ends, it is always terminal in one sense or another.

Now, the three-waves down shown as (A), (B), (C) on the above chart can very likely be the minute ((a)) wave of a barrier triangle. This would make sense, since the major indexes did not make new highs today. That would make the triple zigzag upward as the minute ((b)) wave of the same triangle. So, we will post that count on the S&P500 Index Cash Hourly chart, below.

S&P500 Cash - Hourly - Minute ((a)) and Minute ((b)) of Barrier Triangle

In barrier triangles, the ((b)) wave should not make a daily close above the 0 mark. As long as that doesn't happen, then we are still in the barrier triangle. The ((c)), ((d)) and ((e)) waves are shown only for direction, not length of the waves necessarily. The eventual outcome of a barrier triangle is usually a brief, sub-standard length thrust out of the triangle. This is because the market expends it's energy banging up against that upper barrier.

Given the FLAT wave minor 2, the barrier triangle is the only likely alternating count with it. That's why it is the most preferred scenario at this point in time.

As an alternate, it is possible to get a zigzag-x-flat, with the minute wave ((a)) as the zigzag, and today's up move as the "x" wave. But, in that case, it would be best if the cash index did not make the new high.

Only in the case of closing new highs in cash would we conclude that the waves of the triple zigzag are the five overlapping waves of an expanding diagonal fifth wave that ends Minor 3, and that the downward wave lengths were not long enough for Minor 4. (If this later scenario was correct, then there might be downward overlap problems with it that we will look into again tomorrow, but it is the reason this is our least preferred scenario.)

In any event, the count is so sloppy we know we have been in The Fourth Wave Conundrum of one degree or another. On the very short term five-minute chart, one additional up wave in this series seems likely, as the Elliott Wave Oscillator (EWO) on this time scale is sitting right on zero. Such as wave might make a false breakout and fail temporarily. I say temporarily because even a barrier triangle allows for new highs in the cash market.

Well, regardless of where you are, I hope this helps.
Have a good start to your evening.
TraderJoe

Saturday, September 9, 2017

Backing and Filling

Market Outlook: Still in Minor 4

There remain no changes to The Eight Fold Path Method chart shown below. Over the last week some backing and filling has occurred - a bit more of which is possible.

S&P500 Index Three-Day Chart - The Eight Fold Path Method

From our experience with The Fourth Wave Conundrum, we know that everyone wants to know what the internal count is. The fact us there are three equally valid ways to count the internals at this moment, and that is what we are working on in the live chat room. It has been tedious, and filled with numerous twists and turns for not a lot of point gain or loss.

Still, overall, I expect Minor wave 4 will touch the lower channel boundary, and the Elliott Wave Oscillator will drop down into the -10% to -40% range of the peak high value.

Regards,
TraderJoe


Tuesday, September 5, 2017

Vacation Over

Market Outlook: Still in Minor 4, Lower
Market Indexes: Major U.S. Equity Indexes Lower, DJ Utilities Higher
Today's Candle: Lower High, Lower Low, Lower Close

Equity markets as measured by the S&P500 Index closed Friday at 2476, and took off the long weekend. When they returned, supposedly partly because of the North Korea situation, but later supposedly aggravated by the White House insistence on repealing the Dreamer Act, and the prospects for a budget fight, the cash market gapped down at the open to 2466, rebounded about 6 points to 2472, then fell part into the mid-afternoon, reaching 2446 by 1 PM, and then started a corrective looking rally into the close to finish the day at 2458. When you see the Dow's hourly chart, below, you will see it was clearly another case of "open a gap to close a gap".

So that we don't confuse things, we'll start in order from the beginning with The Eight Fold Path Method first. Here is the three-day chart that we have shown here before numerous times.

S&P500 Three-Day Chart with The Eight Fold Path Method

 As you can see the Elliott Wave Oscillator (EWO) is still red, and declining overall. It should attempt to hit +10% to -40% of the prior Minor wave 3 high, and price should still attempt to hit the lower channel - one way or the other.

From last week, we showed you this up count on the cash S&P500 Index, for what counted at that time as an X wave. We had  to wait and see if prices would ever exceed that high, and they did not. So, our counting was dead on and held by that 0.25 points!

S&P500 Half-Hour Chart - Count of X Wave Upward

The above chart is not complete as of the end of the day, but we posted it in the real time chat room to show that wave (1) downward had been overlapped, and later again (not shown) to show that the ((A)) wave had been overlapped eliminating the variations that could have - but didn't - result in an impulse wave upward.

So, since the wave above did NOT retrace 90% (it only retraced) 85%, and three waves down precede it, the best count we have is the (a), (b), (c), (x), (a) ... count: the potential double or triple zigzag lower. In fact, the DOW only has a 78.6% retrace, and we'll show that chart below so you don't think we are playing games with 5%.

DJIA Cash - Hourly - With 78.6% Retrace Only

Remember, for a FLAT, which this is not, the rule is that the 90% level must be made. This didn't make it, so this is not a flat wave. The only good question that a serious Elliottician can ask, is "is it possible that (a), (b), (c) are actually the first wave of a diagonal, with the (x) wave as the second wave with one of those retraces that is characteristically between 62 to 85%?" And the answer to that question is an emphatic YES! But then, such a downward diagonal, which would likely be Minute ((a)), would have to form properly in every detail. So, that hasn't happened yet. Let's see if it does, or if we only get double or triple zigzags, lower.

OK. Now for those of you who read our "Sunday School" post about the overnight markets, this is how we updated that chart in the real time chat room.

ES E-Mini S&P500 Index Futures - Half Hour Chart - Overnight Session

Clearly, from our update, after the b wave flat, we were expecting a c wave up as the opening bell rang. When that occurred, without filling the gap, and when the b wave was broken lower, it was clearly game on for a decline.

Once again, with backing-and-filling, we do expect the lower trend line on the three-day chart to be attained.

For now, have a very good start to your evening!
TraderJoe






Monday, September 4, 2017

Sunday School

Well. Not that kind. In sort of a rarity on this site, I thought I would document the overnight Sunday session of the ES E-Mini S&P500 Futures to see what they have to teach us. The cash market on Friday could barely move 11 points, but like an invisible bear in winter woods, the futures have this funny way of making big kills - yet not leaving any tracks in the snow (in the cash market, that is).

At some point, the seasoned trader must ask, "do the even futures matter?" Well, certainly they mattered to someone on election night because the futures were first down 100 points ($5,000 per contract), and then, after the halt, they were up 100 points, nearly as fast. But, how about now?

Certainly someone sold something in the overnight this Sunday night. The futures were down - at the lows - about 13 points on the supposed news of North Korea's A-bomb test. Hmm. Not even as much as they were down when a missile flew over Japan. A chart is below.

ES E-Mini S&P500 Futures - Half Hour

However, as the chart shows, anyone who "sold the news" and didn't wait for some kind of pull back would be under water (as the term goes). While those who took a chance on the X wave are in small profits.

There are a couple of interesting things to me. The first is just how quickly the market makers are currently able to stop a decline. One down candle per A-Bomb, I guess. Then, secondly - much as I showed on the Russell 2000 futures, there is a perfect diagonal that has formed from those lows. There are five waves up, the fifth is shorter than the third, the third is shorter than the first, the fourth is shorter than the second, the fourth overlaps the first, and they are all three-wave sequences.

Perhaps, that is an 'a' wave up. That remains to be seen by exceeding that high. In fact, I was very interested to see if that high was exceeded by the end of the session, but it wasn't, so possibly a 'b' wave down is forming.

And that is all very interesting, but the real question is, "what, if anything, does it mean for the cash market?". Why are so many (low-volume) trading hours being expended on this price movement, and the overnight still has another session to go from Monday night into Tuesday morning. Finally, we'd like to note that because the futures do trade 'nearly' around-the-clock, when they do form a gap, the gaps tend to fill quite quickly - usually more quickly than in  the cash market.

The reason I raise this topic is I have been questioning for many, many months whether to even bother to count cash anymore. Cash is a 'calculated, non-tradeable average', except in ETF form where it is clouded by the effects of dividends included in the SPY for example. And, if the futures can go down 100 points on election eve, and then right back up on election day, while cash does (gulp!), um, nothing, then of what relevance is the cash market?!

I think it is true that cash puts a damper on the futures market. It is harder to rig the cash market. And, ultimately, it seems the cash Elliott Wave count must work out. But, yet, it may turn out the futures market has some benefits for wave counters that the cash market may not. For example, what would the Elliott Wave count be in cash if the futures gap, above, closed immediately? What would the Elliott Wave count be in cash if futures prices continued to make lower lows? Remember, nothing since Friday afternoon is even included in the cash Elliott Wave count, yet.

As far as I can tell, this is an undeveloped topic - as far as typical day-traders go. Yet, inquiring minds might like to look into different scenarios to more fully develop Elliott Wave theory. One thing we know for sure, is that while Ralph Nelson Elliott did have overseas markets and gaps to contend with, he did not have to wrestle with this topic of the futures. Lucky him?

Have a very good continuation of your weekend, and your Labor Day, if you are in the U.S.
TraderJoe

Friday, September 1, 2017

The Fourth Wave Conundrum - Part 2

Market Outlook: Two Ways to be in Minor 4, Lower; One Way to Be in A Fifth Wave Up
Market Indexes: S&P500, DJIA, RUT, higher; NDX, lower.
Today's Candle: Higher High, Higher Low, Higher Close

The S&P500 had closed on Thursday at 2472. Prices gapped higher this morning on the soft jobs report, and on the "first of the month money" we said was often likely in previous posts. This is the typical new month inflows from pension funds, dividend reinvestment plans, company bonuses, etc. Prices then traded up to a high of 2480.38, and then started a slow fade on some profit taking late in the day, closing at 2476.55.

First, let's look at the big picture. If we take the weekly chart of the S&P, all that prices did on a low volume day like today was "grind" against the 1.618 extension. Here's a chart.

S&P500 Three-Day Chart with Extension

All day, prices just bucked up against that extension, and even given the soft labor report, and the first of the month couldn't bust it (today).

During the day, I set a limit on how I was counting the potential (x) wave higher. The good news is that level was not busted. It held by a quarter of a point. Here is how I was counting the potential y wave of the (x) wave. Remember, it should count as a-b-c to y. Right now, it does.

S&P500 Cash - Half-Hour Chart - Y Wave as ((A)), ((B)), ((C))

You can see the Fibonacci rulers. ((C)) = 1.618 x ((A)), in red, and (5) less than (3), less than (1), in blue. The problem is with (3) shorter than (1) right now, any movement over 2481 will invalidate the count and force an impulse count higher for this wave. Again, right now. It's OK.

Well, so here we are on a long weekend. And the futures will be open many hours when the cash market isn't. I can't guarantee this pattern won't bust. I can only objectively say, "it held today". It's kind of a real cliff-hanger, but it certainly is possible for the market to gap up seven or eight points on some weekend story or some foreign news. It's also possible for it to gap down. My market metrics are not good enough to tell for sure which will happen. Are yours?

And so, we must play the game of wait & see. The only thing we can say, is that - in terms of length - this up wave is greater than 1.27 times the length of the up wave from 21 Aug. That slightly favors an impulse count instead of the double zigzag. But, the EWO has headed lower, and that favors some continued downward movement towards the zero line. And the NQ futures did make a new all time high today, but closed lower. As you can see, not a lot to go on. In some ways, it feels like a game of chicken.

The Dow did fill it's first gap up - as I showed on yesterday's chart. But, while the S&P now has no gaps above, the Dow has one more such gap at 22087.

The two possible down counts for the S&P are (a), (b), (c), (x), with a further (a), (b), (c) to go. Or the 'possibility' of a leading diagonal, if this up wave breaks the ((A)), ((B)), ((C)) shown and turns into a clean impulse. That's because wave (2) in a diagonal must be an a, b, c zigzag from 21 Aug.

The DOW can be counted downward as just ((a)), and ((b)) at this time. The Dow has not retraced 78.6%, yet, but is beyond 61.8%. The problem with counting the Dow as (a) down, is that within the downward wave, there is no 1.618 extension. And so, the downward Dow wave counts better as a zigzag - like the S&P.

But, if the high in the DOW and the S&P breaks, then "most likely" we are into Minute ((v)) of Minor 3 still - one last gasp to finish Minor 3 before starting the larger Minor 4, down.

Even though we are into a resistance area here, people may have their 'opinion'. They may be bullish or bearish. We may break the all-time-high or not. But it's likely few people can conclusively state 'which' will happen, and why, from a wave counting viewpoint. This is the very essence of The Fourth Wave Conundrum.

For now, have a very good start to your weekend.
TraderJoe



Thursday, August 31, 2017

The Fourth Wave Conundrum

Market Outlook: Still in Minor 4 Lower
Market Indexes: Major U.S. Equity Futures were Higher
Today's Candle: Higher High, Higher Low, Higher Close

Stocks as measured by the S&P500 Index closed yesterday at 2458. The futures were higher over night, and the cash market gapped up at the open. Prices traded higher throughout the session, with only a five-point pull-back to hit 2475 by 3:30 pm. Then, there was a four-point pull-back into the cash close to close at 2471.

The S&P500 high of the day was high enough to invalidate the potential triangle shown over the last several days. It's a shame, but it does represent the uncertainty inherent in fourth waves, and why I have coined the phrase, The Fourth Wave Conundrum. You are probably tired of hearing it. You just want to know what your Elliott Wave count is, without excuses. So would I. But the fact is that when a person doesn't know what the count is, then most likely the count is that of a fourth wave or B wave.

As I remarked in previous posts, IF the triangle count had invalidated, then the next best count is the a-b-c-x-a-b-c count of a double zigzag, lower. That count is now shown on the Dow chart below. But the S&P500 can be counted in the same way.

DJIA Cash - Hourly - Beginning of Multiple Zigzag

The upward price movement may not be over, and so, we are not certain the (x) wave has ended. The Dow has one gap above (circled red). The S&P filled that same gap today. The Dow did not. And both markets have the gap up open today. The S&P500 made a second new high today. The Dow did not. With the Payroll Employment Report tomorrow, it is possible the Dow's upward gap would fill.

But, upward movement for the Dow appears to be in a channel, so far, and there were a couple of closes on the 61.8% Fibonacci level. And, we note that at the y location within (x), the up wave now consumes more time than the down wave (in hours).

I have tried to show by labeling the Elliott Wave Oscillator what the support for this count is - the natural rhythms in the EWO, and the depth of the movements below the line, or heights of the waves above the line.

During live chat today, I checked out the measurements for a diagonal down for the S&P500 to the 2417 level, but the middle wave is too long for that, by just a few pips, and I won't break the rules. In some ways a triangle would have been a simple count to manage. This one, might be quite a bit more difficult - because of it's grinding nature and the nature of X waves.

Well, that's it for today. Let's see where things go tomorrow, and have a good start to your evening.
TraderJoe







Wednesday, August 30, 2017

Continued Triangle Count

Market Outlook: Still in Minor Wave 4, Lower
Market Indexes: Major U.S. Equity Futures were higher
Today's Candle: Higher High, Higher Low, Higher Close

The market as measured by the S&P500 Cash Index closed yesterday at 2446. The futures had been higher overnight, then turned lower. There was a very brief dip in the cash market down to 2444, and then prices immediately header higher. By 3 PM, the market reached 2460, and stalled there, closing at 2458.

Because of the brevity of the early morning down wave, and the ability to count another potential five waves upward, we labeled this morning's low as the ((B)) wave, circle-B, of the potential triangle's y wave of the overall minuet (c), and the swift upward move as the potential ((C)) wave, circle-C of y of the overall minuet (c) wave of the triangle. The hourly chart is below to refresh your memory.

S&P500 Hourly Cash

At the end of the day, price came back down to cross back over, or overlap downwards, the w wave of the triangle. This is not yet fatal for the upward count. Blog followers should note whether ((A)) wave up of y gets overlapped in the next day or two. If it does, that would tend to reinforce the triangle count.

There is only marginal evidence (re: breaking of the up trend line from x) that this upward wave is over. But, while upward price movement could be over for a while, we must allow in the short term that one more higher high could be made. The length of the upward wave is currently satisfactory, but price may want to tag that 78.6% retracement level.

When, or if, the (d) wave downward commences, it is not a requirement that it stay above the x wave. It may break that wave low marginally to set a price trap, provided that it remain above (b). Again, if this is a low-volume triangle, then it is doing of it's job of "wasting time and moving price sideways."

Until further notice, the alternate for this count is a double or triple zigzag lower, however, the triangle must invalidate before considering those. Tomorrow is the last day of the month, and there could be some "end of the month window dressing", prior to the first of the month which, this month, sees both the Payroll Employment Report, and possible inflows from mutual funds, 401k's, dividend reinvestment plans, pension funds, and company bonuses.

So, for now, by the price action today, it should be clear to most that even if this downward wave develops as expected, it is still a corrective wave. Price action is overlapping and choppy, and it likely means that at some point, a new high will be made or attempted. Remember, we have shown only the likely direction of the minute ((c)) wave above - we have not attempted to show it's potential length. If it develops, it could be longer than shown.

So, again, stay loose and flexible as the end of eclipse month draws near, and the Labor Day Holiday approaches, as well.

And have a very good start to your evening.
TraderJoe


Tuesday, August 29, 2017

Likely in the Triangle Count

Today's Candle: Lower Low, Higher High, Higher Close
Market Outlook: Still in Minor 4, Lower
Market Indexes: Major U.S Equity Indexes Finished Higher

The market as measured by the S&P500 Index closed yesterday at 2444. Overnight the stock index futures traded down to 2421 on the news that North Korea had fired a missile over Japan. The cash market opened gap-down this morning at 2428, and closed the gap from 21 Aug in the process. That gap is shown by the black circle on the chart below.

Prices then turned upwards, and we were able to count a complete or near-complete five-wave sequence upward. (It can be counted complete as is, or with one smaller new high tomorrow). The lack of down side follow-through after the open, the whippy action, and having 'five-waves-up' at this location most likely means we are in a triangle which served as our Primary count in previous days, even if some down side acceleration did occur today. It was quickly negated.

Here is the hourly chart of the S&P500 Index Cash.

S&P500 Cash Index - Hourly

Remember, this count contemplates minute ((a)), circle-a, triangle minute ((b)), circle-b, and then minute ((c)) downward to finish wave Minor 4. Wave ((c)) can go a lot lower than shown where it is just for directional sake.

This running triangle if it does play out does have eventual bearish implications. But, it is likely that participants are just being whipped around in the light volume now until the Payroll Employment Report on Friday and more participants return after the Labor Day holiday in the U.S.

If you believed the bit about this morning's down move being caused by North Korea, earlier, then you can also believe that the up move was caused by the duly appointed Plunge Protection Team buying the dip to send a message to North Korea that they are not going to play havoc with U.S. financial markets by sending off rockets. As for me, I'll just stick to counting waves.

This leg of the triangle is likely a complex wave, composed of the double zigzag w-x-y. The x wave shown on the chart stopped at the 78.6% Fibonacci retracement level. Thus, the triangle would suspect that the (c) wave would also stop at the 78.6% retracement level, before beginning wave (d) downward.

The good news is that - if this is the complex wave of the triangle - then waves (d) and (e) - when they occur - should be simple zigzags. For now, the impulse down count is kaput, and the best alternate to this could would be a double or triple zigzag, still downward.

Here's an update on The Eight Fold Path Method for the Three-Day S&P500 Cash Index.

S&P500 Cash - Three Day Chart - The Eight Fold Path Method

As you can see, the Elliott Wave Oscillator is still declining since the last update, and price is inching ever so slightly toward the center line of the channel. At some point - likely after the hourly triangle, above - the ((c)) wave of Minor 4 should come down to attack the lower channel boundary. At that point the EWO should go to within +10% to -40% of the zero line versus the high reading.

As I have said many times, fourth waves can be silly and unpredictable, so don't get discouraged. Stay loose and flexible, and keep your eyes on things even if on vacation or planning to go. For those of you familiar with triangles, this is a great opportunity to get some experience. The current triangle would now invalidate only below the low of (b), or above the high of (a). However, a ((B)) wave, up, of the y wave of (c) would now invalidate below the low of the x wave. The very flat nature of the EMA-34 at this location is also supportive of the triangle count.

For now, have a great start to your night.
TraderJoe

Monday, August 28, 2017

Lower high, Lower low, Higher close

Market Outlook: Continuing in Minor 4, Lower
Market Indexes: S&P500, Russell, NDX, Tran were Higher; DJIA Lower.

Stocks as measured by the S&P500 closed at 2443 on Friday. Stock Index Futures were initially lower on Sunday night, then swung higher in the morning. The cash market opened with a gap and rallied to 2449.  Then, as with many recent days, the opening gap was sold off and closed roughly within the first hour, trading down to 2439 by 12:30 pm ET, which filled the gap up open from 25 Aug.

Prices then rallied to 2443, in a slow slog sideways until the close, in what looked to be a corrective pattern, finishing at 2444, one point higher than they closed on Friday.

Here is the S&P500 Daily chart. As the moving averages begin to gain separation, prices overall had a lower high, lower low, higher close candle, more-or-less trapped within the moving averages.

S&P500 Daily Chart

Both of the previous counts we were working on remain on the table. They are minute ((a)) down and now in triangle ((b)) of Minor 4; or minuet (i) down, minuet (ii), up, and now in minuet (iii), down, of minute ((a)), down, of Minor 4. IF we are in the latter count, since today ended with a corrective sequence, upward, then there should be increased downward momentum tomorrow.

There was more declining volume than advancing volume today, and declining issues on the NYSE were ahead of advancing issues. There were more new 52-week highs than lows today in a day with very light volume overall.

Again, take it slow. Be flexible, and keep an eye on things - even if on vacation or thinking of it . A good way to make sure there is less participation in a corrective move is to do it when most people have other things on their mind.

Cheers and have a good start to your evening.
TraderJoe

Saturday, August 26, 2017

Russell Pattern

Since we have presented our overall market views quite clearly over the last several weeks and months, we thought we would take a moment to present an educational post which is relevant to the present. There are any number of people who are interested in the Russell 2000 Index. And this week something has happened which is fairly rare, but still a part of Elliott Wave analysis, overall.  Many, many people don't like to deal with complication and the rules like this, but my hope is that through repeated exposure, one might gain more comfort with some of the basic Elliott Wave patterns.

So, without further delay, here is the hourly chart of the Russell 2000 E-Mini Futures since the low on August 21. We hope you will study this pattern, and read this entire post in detail.

Perfect Diagonal

Russell 2000 E-Mini Futures - Hourly

This contracting pattern upward, is easier to discern for trained eyes, but we think that many beginning wave counters might have a problem with the details. This pattern looks, and counts, like a perfect contracting diagonal.

If you take the measurements, you'll find that wave (5) is shorter than wave (3), wave (3) is shorter than wave (1), wave (4) is shorter than wave (2), wave (4) overlaps wave (1), downward, and each of the waves can be parsed into three-wave zigzags. And that's where the fun begins.

We think the hard section for most wave counters would be the "running triangle" b wave within the wave (3), upward. A triangle somewhere in the middle of a diagonal is actually quite common. It causes the novice analyst to think that wave (3) is over at (b) - which is not an unreasonable thought - until the downward pattern starts to develop at (4), but doesn't show the rapid price drop expected after a completed diagonal.

Another difficult part is that sharp (e) wave drop as the last wave in the triangle, but it does not violate the (c) wave low of the triangle - just as required in a running triangle.

Something else that is quite common. Note how wave (5) just peeks over the top of the upper rising diagonal trend line in a very characteristic throw-over. It is incredible to see that tiny detail.

Well, if that were the end of the story, then it would be a useful enough example, but here are some other tips you might like to note.

First, in order to prove out your work, with 100 or more candles on the chart, you 'should' be able to run an EMA-34 through this pattern, as we have below.

Russell 2000 E-Mini Futures - Hourly - With EMA-34


When you do this, you 'should' find that every numbered wave winds up on an opposite side of the EMA-34 which helps assure "form and balance" in your count. And, as you see above, it does!

Next, if you add the Elliott Wave Oscillator as an indicator on the chart, you 'should' find that if this pattern is truly a diagonal, that the highest momentum will be in wave (1). Let's see.

Russell 2000 E-Mini Futures - Hourly - With EWO

Well, as you can see from the above, the peak of the EWO occurs in wave (1), with lower momentum for waves (3) and (5): with them currently showing as divergences. You will also note that sometimes in a diagonal, wave (4) does not always come back to the zero line, as it does in an impulse. This is often because wave (4) is usually shorter in price & time than is wave (2), in order to maintain the diagonal definition.

We know that some people take a much more casual approach to counting waves, and sometimes if they see any contracting pattern, they call it a diagonal. But, we have seen many on the internet where the prospective analyst doesn't even have overlap between waves (4) and (1). This is just asking for trouble in wave counting. Why count patterns incorrectly when there are numerous example of patterns that follow the rules that can help guide the way to a successful Elliott Wave experience?

For completeness, if there is any error on the chart, it is most likely on the extreme right-hand side of the chart. Due to the compactness of the waves, and difficulty in counting in that area, it is possible that wave (5), up, is really just wave a of (5), up. And that would be reasonable given the lengths in time of waves (3) & (1). But that possibility can be seen in advance, and planned for as needed from a trading perspective. Remember, wave (5) does not invalidate upward unless or until it became longer than wave (3).

Still, the market has already started lower and there is no reason to question the count unless the high of (5) was exceeded. And, in particular, if the low of the (e) wave of the triangle were exceeded lower, it would likely confirm the end of this particular upward wave sequence, and that a move lower was underway.

We hope this type of clear example furthers your Elliott Wave education, and makes you more of a believer that the rules and guidelines can be followed to yield the correct results. There are numerous examples on the web of people who don't follow the rules and guidelines. For example, there is one web-site that even today lists a pattern termed an "irregular zigzag". In other words, it would be, if the pattern existed, a zigzag with a higher b wave than the start of the a wave. The fact is that there is no such pattern. Such a pattern would "break the rules" for the very definition of a zigzag. (P.S. the correct pattern is a flat). Yet, this site keeps brandishing it's version of can do no wrong Elliott Wave, and yet gets all of the major turns incorrect.

In the most recent example, this web-site had bought the bullish fever, and, even as we were looking for a turn for Minor 4, and called the triangle, and the last wave, it was still trying to count a never-ending series of micro waves higher! Wrong yet again. Wrong at the May 2015 top, wrong at the February 2016 bottom, wrong at the August 2017 high. And keep in mind this site wants you to pay handsomely for an Elliott Wave education!

You, of course, are free to do as you chose. We will always admit our errors here, and look for why they occurred - even to further our own education. We think it's as much about the journey as it is the results, and we hope you agree.

Have a really wonderful weekend.
TraderJoe

Friday, August 25, 2017

Potential Inverted Hammer

Market Outlook: Still in Minor 4, Lower
Market Indexes: Most U.S. Equity Indexes weakly higher

Well, in true fourth wave style, a potential gap down lower did not occur today. The market closed yesterday at 2439, gapped up at the open to 2445, and continued rising to 2453 until chair Yellen's comments at the Jackson Hole Summit were released.  This rise closed the gap down from Aug 22, but in the process left another open gap on the chart. But, the price rise did not exceed that day's high.

At that time, we published this potential C wave failure count, and the C wave high was not exceeded for the rest of the day. That would make a zigzag for wave ((2)) and an expanded flat for wave (2).

SP500 30-Minute Chart : C Wave Failure?

Then prices made five-waves-down to 2442, not quite closing the opening gap. Then, there was a near exact 78.6% retrace to 2451 until Mario Draghi's comments were released. Those upward waves moved in a narrow channel, were very choppy and overlapping, and were at a lower angle than the prior upward waves. We counted the upward waves as a double zigzag w-x-y.

Prices then headed slightly lower after Draghi's comments were release to end up at 2443, still not closing the opening gap.

Only the fact that a higher high was not made over wave ((iii)) on Aug 22 keeps a potential impulse count lower alive. The triangle count is still alive too should the above count not prove to be an impulse lower. As a trader on CNBC said today, "2440 is kind of a fulcrum for the S&P500 right now." Makes sense.

The Daily Chart of the S&P500 Index is below. As we said before, one gap was closed (black circle) and one gap was opened.

S&P500 Index Daily - Possible Inverted Hammer Requiring Confirmation


On the daily chart, the daily candle has formed an inverted hammer candle under the EMA-13 and EMA-34. And this candle potentially is supportive of the impulse count, lower. Still, as with most candle patterns, downward confirming closes are needed.

For now, have a good start to your weekend.
TraderJoe


Thursday, August 24, 2017

Cash Outside Reversal Day Down

Market Outlook: Still in Minor 4, Lower
Market Indexes: DJIA, SP500, NDX closed lower, RUT higher

The S&P500 closed yesterday at 2444. At the open, it gapped higher and traded to 2450, again stopped by the resistance of the EMA-13, and EMA-34. This created a slightly larger blue b wave than we showed last night (in the triangle count), or a slightly larger wave ii in the more impulsive ((1)), ((2)), (1), (2) count.

Prices then reversed lower, closed the gap, and traded down to 2439, before rallying to 2447 in a retracement. When news hit of the continuing arguing between the President and the Senate Majority Leader, prices again reversed and traded down to a lower low at 2436. Prices attempted to rally again, but only to 2445, failed and reversed lower to close at 2439.

SP500 Daily - Outside Day Down

The daily candle has a higher high than yesterday, a lower low, and a lower close than yesterday. The futures only has the lower low. Still, no gaps have been filled, and the number of intraday reversals is characteristic of the "grinder" we have referred to in the last couple of days.

Today's trading action near and at the close was suggestive of a gap lower tomorrow. If that occurs, we may get a third wave within a diagonal lower. Since that remains to be proven, I will only show that count if it occurs tomorrow, and discuss any implications then.  Suffice it to say on the cash chart the more impulsive count lower would come into question if the high of today's candle were taken out higher within the next two trading sessions, as this would constitute a "bear trap". The triangle count can survive taking out the high of today's candle.

For now. Keep it simple. There are lower highs on the daily chart, and there are two recent lower closes. Still lower daily lows are expected in this down trend. While this does indeed even 'feel' like a corrective fourth wave - in the way that it is trading - patience and flexibility are still needed because fourth waves, as I have said before, can be quite unpredictable.

Have a wonderful start to your evening.
TraderJoe

Wednesday, August 23, 2017

Inside Day - Within the Grinder

Market Outlook: In Minor 4
Market Indexes: Slightly Lower Closes

Yesterday, the S&P500 Index closed near the highs of the day at 2052.51, at the resistance of the EMA-13 and EMA-34. Prices gapped down to open at 2443.84, trading as low as 2441.42, then trading higher to 2449, before trading lower again to close at 2444, forming an inside candle with a lower close - as shown below.

SP500 Daily - Gap Down and Inside Day

There are now three open gaps on the chart. The advance decline line, up / down volume, and new highs - new lows were slightly to the positive side. The $VIX did however close above both of the 100-day SMA and 18-day SMA's, with the 18-day above the 100-day SMA in a bullish cross.

From an Elliott Wave perspective, the potential triangle we showed yesterday remains a good possibility. Today was certainly slow enough. That count is repeated below.

SP500 Half-Hour : Potential Triangle Count Still Working

But, as with most triangles, should the invalidation level be exceeded lower, it is possible to consider a 1-2-i-ii count lower. (Keep in mind the above triangle also invalidates if, from here forward, the (a) wave, upward, is exceeded higher.

The alternate count is shown below. It is not the alternate because it is less probable. It is only the alternate in this case because there is less evidence for it. The odds are about 50:50 for either, at this point, pending some news event. The second count has the potential gaps of a third wave working in  it's favor.

SP500 Half-Hour : Impulse in Channel Alternate

The above count would assume more credibility if / when the X wave of wave (2) is exceeded lower. Right now, price was exceptionally slow today. If the speed picks up significantly in the downward direction overnight or tomorrow, the second count should be seriously considered. The second wave, (2) in this case is a rather rare bird called the flat-x-zigzag.

But for now, have a good start to your evening.
TraderJoe