Ground Pork

Market Outlook: Now Getting Higher Volatility
Market Indexes: Major U.S. Equity Indexes closed higher; DJUtil lower
SPX Candle: Higher High, Higher Low, Higher Close - Trend Candle ?
FED Posture: Quantitative Tightening (QT)

Today, we likely completed a five wave sequence, upward, shown on the S&P500 Cash 5-minute chart below.

S&P500 Cash Index - 5 Minutes

In another reversal and grinding wave, the S&P500 cash index gapped up at the open, did not fill the gap and traded higher. In the process, a non-overlapping five-wave sequence with a sharp for wave ((2)) and and very long flat for ((4)) can be counted. The wave has good alternation and (although there are not 120 candles on the chart) it follows The Eight Fold Path Method for Counting an Impulse quite well.

The wave made a slight new daily high today, before falling off at the end of the day, and, therefore, the e wave of the proposed hourly triangle did not survive. Bye-bye. Those are the objective rules.

Still, with today making only a marginal new high, and with all the overlaps, the count has morphed to the cousin of the triangle, the contracting diagonal. The purpose of this potential contracting ending diagonal would be to make a corrective c wave up, as follows.

S&P500 Cash Index - Hourly - Marginal Higher High

The five minute chart above shows the five waves in the blue .c wave to (iii). Remember, we are not showing the .c waves for clarity. Notice that today's slight higher high is currently on a divergence with the Elliott Wave Oscillator (EWO or AO).

IF a fourth wave (iv) down occurs in good form, then it should retrace between 50 - 85% of the prior wave, and it would overlap wave (i) again in the process, and cross back down under the blue EMA-34 for good form and balance.

On a side note, we showed you several days ago the .a wave of (iii) was a contracting triple zigzag which we said could also be a contracting leading diagonal.  Here it is as the .a wave in it's contracting leading diagonal form.

Overall, the objective of the c wave would be to make a higher high than the a wave to avoid a truncation.

Today, the daily Dow ran smack into it's daily declining trend line from the high, and then backed off of that line. It's very interesting, but also very hard to tell what it means just yet.

Bottom line: still whippy go-nowhere waves after the gap. Still grinding, and grinding with little follow-through. That's OK, though, we will remain neutral, patient and flexible - following the rules - until the clearer pattern emerges.

Have  a very good start to your evening.
TraderJoe