Wednesday, May 31, 2017

Higher then Lower

In a very choppy and narrow point range day today, prices first headed higher in very early morning. Today was 'window dressing' day, the last day of the month. Tomorrow is the first day of the new month - which often sees inflows from 401k's, pension programs, company bonuses, etc.  This effect is somewhat less pronounced in the summer time, however.

The ES futures almost made a new high, the NQ futures did make a new high, and then backed off. The cash S&P did not, contrary to the possible fifth wave up we thought was possible. Within the first hour, when this morning's opening gap was filled, we published the minute ((b)) wave count as likely completed. This is shown below.

SP500 Daily Chart - Minute ((b)) Wave Likely Completed

If the upward count is done, it must have completed as an ending diagonal triangle shown on the five  minute chart below. The measurements are correct for such a pattern, and it's beginning has been exceeded lower.

Minute ((b)) Wave Possibly Finished with Ending Diagonal

Near the close of trading today, price has retraced nearly 61.8% of it's downward wave. The exact downward count can be treated as a diagonal with a 61.8% retrace. But I would want to see a new daily low beneath 2400, before a new high of 2419 to better solidify minute ((b)) is over in the upward direction.

Remember, minute ((b)) waves can be real stinky. A new high can't be ruled out - just yet - but it seems less likely. As an alternate, today could just have been the smaller b wave shown currently between (x) and ((b)), on the daily chart.

Have a good evening.


  1. clear, concise, to the point!

  2. Par for the course...first update you mention B likely completed it just keeps on truckin next day

  3. This is just dominant monthly bollinger band squeeze at it's finest. NDX and QQQ might need a rest but they are likely going a lot higher for a lot longer. I will remain bullish until the leaders like SOX and SMH show some weakness. It's not worth following any count until the leadership falls behind.