Tuesday, February 21, 2017

William Tell

The market as measured by the ES E-Mini S&P Futures may be about to give us a big "tell" as to where the overall Elliott Wave Count resides, William (.. or Wilma). Many major market indexes made new highs today, some of them, twice. With that in mind, and momentum still strong, it does suggest we may still be in the minute wave ((iii)) of Minor wave 3, higher.

But, there is a significant caution because of overlaps at the end of the day. If we look at the ES two-hour chart, there is one location (the 2320 level) from which I can count only three-wave sequences.

ES E-Mini S&P Futures Two-Hour Chart

The chart above shows the three-wave sequences (connected with blue swing lines) to show the internal a, b, and c sequences of a potential diagonal upward. The Fibonacci ruler, also shown, shows that minuet wave (iii) is currently shorter than minuet wave (i).

And at the close price acted much differently that it usually does. Instead of breaking the stops at today's high and following through to the upside, there was a bit of a sell-off instead.

So here is the "tell". If price in wave (iii) remains shorter that 2368.50 and a fourth wave downward begins and overlaps wave (i) at the 2351.50 level, first, then there is the possibility of a diagonal forming to end minute wave ((iii)) on the larger ES 12-hour chart, shown on Thursday February 16th, post at this LINK.

Again, diagonals must form properly, and wave (iv) would need to remain shorter than wave (ii), and wave (v) would need to remain shorter than wave (iii) overall, if and when we get there.

So, the upward invalidation is 2368.50, if that occurs before wave (iv) forms, and the downward invalidation for a contracting diagonal is that wave (iv) may not travel below the low of wave (ii), or be longer than wave (ii).

The market is getting increasingly choppy. All of today's upward movement after the sell-off to the 11:30 am low, was both hesitant and overlapping. If the upside invalidation level of 2368.50 is broken upward first, before wave (iv) forms properly, then the market is sub-dividing further higher, but it is hard to see that with all the three-wave sequences.

Hope this helps.


  1. ED almost busted unless 'a of iv' is making an expanding LD. Would need to see a new low shortly below 2355.25.

    1. This comment was not at correct overall. Please see my post of Saturday that will be up by 6 PM ET, Saturday.