Under No Grand Illusions

I harbor no such illusions about being able to 'nail' this correction. So I start small. Today, in the comments for the previous post I was able to count down a diagonal wave. Because of the way it formed (as 3-3-3-3-3) but with a lower fifth wave, it could be ending, or it could be leading! Thank you Mr. Market for providing two options in the same exact wave. (I have discussed that in posts before: some diagonals can be their own alternate wave.)

But, as stated previously, I was looking for a downward wave that would break the recent up trend line. Today's wave did that, and it did something else - as well. Here is the hourly chart.

ES Futures - 1 Hr - Long Enough Minute ((b))

Today's wave - because of its shallow angle - also wasted enough time to be able to become a minuet (c) wave of a completed minute ((b)) wave at today's low. If you will view the time ruler, you can see that this sequence, starting at the end of minute ((a)), with minuet (a)-(b)-(c), is now longer in time that the upward diagonal - which is potentially a leading diagonal. We simply won't know that unless or until its high is bested.

But, the minuet (b) wave is interesting: it hit the 90% level, upward, qualifying it for the (b) wave of a Flat wave, and that means the structure that you see here could be a simple truncated flat for minute ((b)).

Of course, we do not know what tomorrow's employment report will bring - although we could see today that factory orders were weak. Still, employment tends to lag other data by a few months. Therefore, we have posted an alternate that today's diagonal is only wave 1, of a larger five wave minuet (c) wave to finish minute ((b)) lower than today's level.

If, instead, there is another five-wave sequence, upward, from here then the objective would be to finish a second wave, Minor 2, with a retrace wave that is longer in time, than Minor 1, down. And, it would be excellent if it surpassed the March highs so there was no truncation.

The Elliott Wave Oscillator on this time scale, is not providing too much help, so it will be best to see how employment looks tomorrow, and to try to gauge the reaction to the report.

Have an excellent start to your evening.

TraderJoe