ES Daily Candle: Lower High, Lower Low, Lower Close: Trend Candle
Market Posture: Neutral and Probing
Daily Swing Line: Lower (Lower High, Lower Low)
Daily Bias: Down (Settle Below 18-day SMA)
After showing five-waves up yesterday (see left side of chart below), overnight the hourly ES futures were up about 16 points before turning lower. The cash market opened with a gap and traded much lower.
|ES Futures - 1 Hr - Five Waves Up & Down|
As per the chart above, we were able to count a non-overlapping 'five-waves-down' in the futures market by the cash close. There is the possibility this is the a wave of a correction, as the low of 3 October has not been exceeded lower, yet.
If so, an upward b wave should break above the upper channel boundary to slow things down a bit, and then there should be a c wave lower. As it was, prices hit the 62% retracement level and exceeded it somewhat.
For any continued up trend, it would be best to see prices hold above the 2,855 low - even if this correction should travel a bit further lower. At this point in time, the corrective downward movement has not taken as much time as the upward movement. It may just be that the market is trying to elongate the correction so it takes more time.
Can price movement just break lower, tomorrow, and keep on going? Yes, that is a risk to a corrective wave count at this point. But, until or unless we see evidence of that happening, then we will use the count as it seems at present. But, the $VIX now being often above 20, it should appear to most that things are quite a bit different then they had been when the $VIX would trade for days and weeks between 8 - 15.
Have a very good start to your evening.