Market Indexes: NQ Futures made new all-time highs; Dow and S&P 500 cash, not.
SPX Candle: Lower High, Higher Low, Higher Close - Doji Candle
FED Posture: Quantitative Tightening (QT)
The market as measured by the S&P500 Index has closed yesterday at 2,573. Overnight the futures were higher, and there was a small gap up of four points, extending the blue (C) wave up, as we had suspected might happen ("often", not always) in yesterday's post. The market traded up about four points to 2,577, then within the first thirty-minutes turned lower to fill the gap. After trading weakly down to 2,572, the market turned slightly higher again - in the process tagging the 62% retracement level of the down move. This may be seen on the updated chart below.
|S&P500 15-Minutes Likely (C) Wave|
In the process, the cash market may have traced out an ending contracting diagonal for a (C) wave. Wave 5 is shorter than wave 3, Wave 3 is shorter than Wave 1, Wave 4 is shorter than Wave 2, and Wave 4 overlaps wave 1. Further, each of the segments may be counted as a zigzag.
By the end of the day, price had fallen out of the potential diagonal trend lines, and at the close had just overlapped the upward (A) wave in the downward direction. As always, potential diagonals must prove themselves, and this one must do so by trading lower than the start of the potential diagonal, the extreme of the (B) wave in less time than it took to build it - or before the end of tomorrow.
We also noted that the upward corrective wave has now consumed more time than the downward motive wave (expanding diagonal) did. That was something that hadn't happened yesterday and made me suspicious that more up movement could occur.
So, since the ((A)) wave down is a diagonal, if a ((C)) wave down begins tomorrow, then the ((C)) wave itself should be an impulse in it's entirety, not a diagonal, although either wave (1) or (5) of the ((C)) wave - which are waves of lower degree - may be a diagonal. This is so that there is a good pattern of alternation within the corrective structure.
Those of you who are Elliott Wave students can clearly see the alternation in the ((B)) wave, itself. Wave (A) is a short impulse, and wave (C) is a very long diagonal. This is a very typical pattern of alternation within a corrective structure. Looking for proper alternation can help provide one patience in slow markets.
Again, if a ((C)) wave downward forms properly, we may have the beginnings of an upward diagonal or the continuation of a triangle. We briefed that live chat room on how an overall upward diagonal might happen to finish wave minute ((iii)), pending that outcome. If we get the needed wave structure tomorrow, I will post it here, also.
For now, that's a lot of work for an inside day. So have a good start to your Halloween! I will.