While others are extolling how this bull market will go on for years to come, the chart below may tell a different story.
|NQ Futures - Weekly - Potential Ending Contracting Diagonal|
It seems like years ago I proposed that a Primary 5th Wave could end as a diagonal, or as impulse, and I really didn't care which. But, it does seem like the importance of a Primary 5th wave in ending a Cycle size and / or a SuperCycle size wave might merit a diagonal in a "too far, too fast" move.
With the NQ futures higher high this week, I think you might be able to finally visualize how such a wave might form. The tortuous flat bottom from late February 2016 to November 2016 can simply be Minor A and Minor B of a long stretched-out zigzag for wave Intermediate (1).
And the grinding wave higher from November 2016 to late January 2018 is the C wave - which ends on a high of the Elliott Wave Oscillator. If so, then the 38% retrace wave to Intermediate wave (2) is a sharp zigzag as required in a diagonal wave. If an upward zigzag completes properly for Intermediate (3), then another sharp wave down could potentially occur for Intermediate wave (4), after which should be another zigzag wave higher for Intermediate wave (5) to end the primary wave.
Although in Friday's post I indicated again the diagonal possibility, the wave labeling above takes precedence over that on the daily chart. I had some time to think about this after the heat of battle on Friday, and really like the fact that the Elliott Wave Oscillator is now diverging on a higher wave. So, that is likely Intermediate Wave (3) - which does not seem quite finished yet.
If a count like this occurs, it may be coincident with a "sell May, go away" type of market. Again, this is not for certain. Diagonals are waves that must prove themselves in every aspect. I also really like the fact that in the S&P500, the C wave of (1) would be literally a point shy of C = 2.618 x A, as I have noted before and written about in this blog. And I like the fact that few other Elliott Wave sites are looking for a count like this one.
Perhaps the S&P will follow-through with higher highs like the NQ. Or, perhaps, the S&P500 only forms a triangle while the NQ forms a diagonal.
I do hope you have a truly good weekend - and now have something else let roll around in the back of your mind!