Flaky is As Flaky Does

Market Outlook: Now Getting Higher Volatility  
Market Indexes: Major U.S. Equity Indexes closed mixed
SPX Candle: Lower High, Lower Low, Lower Close - Doji Candle
FED Posture: Quantitative Tightening (QT)

We have been writing about the lower equity volume over the last week, yesterday at about 3.0 billion, up from 2.7 billion, on the NYSE. Today did not burn the barns doors off either at only 3.2 billion shares, but it is coming back a bit.

Prices, as measured by the S&P500 Cash Index, dipped, then rose, then dipped again, and rose again creating another red doji candle which might be another weak hammer candle. But it is not reliable yet, and, as we said yesterday, prices would need to first overcome the hourly descending trend line along the recent tops to start to provide some confidence that the next wave higher was underway. That has not happened yet.

S&P500 Cash Index - Daily - Bounce off Channel Mid-line

Wave .iv has now gotten down to 0.618 x wave .iii - which is a very, very deep fourth wave indeed. It almost overlapped wave .i (but didn't), and it currently bounced off the mid-line of the channel. That is the limit for the wave, as much more travel lower and it would likely overlap.

The deep fourth wave is a symptom of the awful momentum we said we would expect as this Minor 5th wave progresses. It's not letting us down in that department. The Elliott Wave Oscillator is red and declining for the second day in a row, but is still well above the zero line.

Keep your eye on the line down across the most recently five daily bars, and see if it can be exceeded. Until then, flaky is as flaky does. 

Have a good start to your evening.
TraderJoe