Unless you were able to follow the comments from yesterday, you might not know that last night was "burning the mid-night oil" when tariffs were announced on Mexico. The problem became that waves were now becoming too long in time, and in price, with smaller and smaller retracements. Here's the ES 4-Hr chart, which is being used so that it contains prices from all-hours trading.
|ES E-Mini S&P500 Futures - 4 Hr - Nested 1-2's?|
This chart was actually developed and posted last night. Because the next wave down from 2 / B is actually longer in time, but not yet in price, than the first wave down as 1 / A, then these waves must be of the same degree. Of that there is no doubt, and I wrote about that in yesterday's post.
But, now we see at red ii, that the wave is not longer in time than the prior blue (ii) - as might be expected of a fourth wave - if this were a roughly equal C wave. And that is a problem. A big one. Therefore, until we know more the primary count is 1-2-3 in the downward direction. It is 'possible' a 1.618 wave will form downward, and Monday could see additional price slide. The alternate must become and remain an A-B-C count lower. Note: The degrees posted on this chart are simply for 'relative' wave counting information. Actual degree labeling is pending evaluation.
Prices are still in the channel, above, and the daily MACD is still below the zero line, and the daily Elliott Wave Oscillator does not have a divergence. The Russell 2000 has had it's 18-day SMA cross lower under the 100-day SMA in a bear cross.
On the daily chart, ES prices are still pushing down on the daily lower Bollinger Band. The NQ and ES futures have their daily slow stochastic embedded to the downside. The Russell's slow stochastic has been embedded for several days now. Crude Oil fell more than another $3 today, and that is signalling some kind of slow down in the economy, too.
The message here is that while there may be pull-backs and backing-and-filling, all it may take to send stocks sliding is a lack of buyers: a so-called buyer's strike.
So, as always, take care, be flexible and be patient.
Have a good start to your evening and to your weekend.