|Daily ES E-Mini S&P500 Futures|
If the March high capped minor 3 wave up, and then we had three waves down to minute (a), and three waves up to minute (b), then the most common form for wave minor 4 is five waves down to minute (c).
The most important item on the chart would be the 38.2% Fibonacci level at 2261 as this is a common target for a fourth wave retrace after a third wave is completed. But, in a Primary 5th wave with lousy momentum, there would be nothing wrong with a 50% retrace of this wave, either, at the 2217 level. It would be best not to "micro-manage" this count for several reasons.
First, price can go sideways at any point before going significantly lower - like today. There was an initial lower low, then sideways, making for a green candle overall. Next, there is some evidence already that the downward wave has not followed the Eight Fold Path, and even though it may be counted as a five-wave sequence lower. So, it may only be an "a" wave, lower, and starting an ending diagonal (c) wave, lower.
But, in the less common form of a fourth wave, the exact same sequence since minor 3, can be counted as minute (w), and minute (x), meaning that a minute wave (y) down to minor 4 would only be a three-wave sequence. It is probably the level that is more significant than the form. And the form only reflects the issue we have pointed out before - in numerous posts - and in our YouTube channel. And that issue is titled, The Fourth Wave Conundrum. It is nearly impossible to tell, in advance, what form a fourth wave will take, although some clues are provided in advance.
The most significant clue was that, since minor 2 was a simple zigzag (sharp) wave, then minor 4 could be expected to be a flat, with or without a higher (b) wave, and so far, we are headed very much in that direction. But, it could also devolve into a double-flat or flat-x-zigzag - if that's what it takes to fool the most people - and still make the 38.2% retracement. The only sequence that would not seem to apply here would be a triangle from these levels, because with this form a triangle could not reach the 38% retracement level.
Because this is likely a corrective wave sequence overall, whippy market behavior is still expected. So for that reason, remain patient and flexible.
Have a good evening.