Impulse

For reasons we explained in yesterday's comments, in the ES futures the minute ((b)) wave up completed in the over-night as a relatively rare triple zigzag. It ended between 1.50 to 1.62 times the minute ((a)) wave down. The hourly chart of that wave, and today's wave down is shown in the chart below.

ES Futures - 1 Hr - Minute ((b)) Up Completion

Today formed a clear five-waves-down impulse pattern with wave ((3)), above, just a bit longer than 1.618 x wave ((1)). We counted out this wave in near-real time.

Amazon earnings statement after the close drove the market to fresh new lows likely out of a triangle pattern. But, the five waves are clearly visible on the chart above. In doing so, the lower parallel channel was broken. A significant up wave - for even a retracement - has not started yet.

It is likely that this down wave will evolve into a minute ((c)) wave, lower, of Minor B. But, you know B waves. How low will they go? Well, the first target would be back to the 2,700 low. But, it could go much lower.

The first task, however, is to see if a significant retracement occurs.

Have a good start to your evening.

TraderJoe

Rarely

Rarely do you see two Elliott Wave counts that look this equivalent. It is at times like this we must let the wave count sort itself out by making waves long enough to invalidate one or the other.

SP500 Cash v Futures (1 hr vs 4 hr)

While many, many analysts jumped the gun on a likely "crash wave", we are still searching for a good enough retracement wave to end one up-wave series.

In the first instance of the S&P500 cash count of five-waves, we could not find fault with you if you called this "five-waves-up". The only difficult portion of the wave is the third wave. It almost looks in that count like minute ((iii)) is a diagonal - which it should not be, but there might be microscopic ways to resolve it.

Not to make life too complicated, but is it possible the B wave "snookered" us, and already occurred? If so, have a look at the right hand side of the chart again. I favor this alternate least, but .. each of the alternates seem to point to lower prices ahead.

ES Futures - Right Hand Side - A,B,C ?

We don't know yet what we don't know. But, it is likely that a corrective wave to an A wave has to have some proportional time characteristic to it. Not always. But, very very often.

P.S. the ES futures made a new high in the after hours, and may have completed the diagonal we referred to in yesterday's comments. If so, the futures should stay within 2,965.50 in the after-hours.  Watch for overlaps, and in no case can the futures trade below 2,920 without signalling the likely end of today's up wave.

Have a good start to your evening.
TraderJoe

Minute ((b)) Qualified

The chart below of the cash SPY shows that it (and the SPX) "went marginally over the top". Since they clearly made the 90% retrace level, they qualified for the Minute ((b)) wave that has been discussed for several days now. We said we could not call them "b" waves until they reached that 90% level, and here they are - and then some.

SPY - 30 Min - Minute ((b))

Today's up movement filled that cash gap at the 287 level shown by the black dashed line. However, there are now two open gaps below the current price - as shown by the red circles. The higher high occurred on a divergence with the EWO, and the day ended with a reversal candle. As typical, a confirming significant lower close candle in the cash market would be needed to better confirm the activation of the pattern.

Note that the up wave took a longer time to reach the new high than the down wave took to form. Also note that the futures have not (as yet) eeked out a new high. There would be nothing wrong if they did.

Also, note on the daily chart that the ES slow stochastic is now back up above 80 at just the "over-bought" level, as it is not embedded.  But, price bias is higher, and price is not up to a daily upper Bollinger Band.

Blog readers are encouraged to draw the relevant up trend lines and monitor the situation to see if price breaks below them, and back-tests. The location of minute wave ((c)) can not be precisely located at this time, but it may be expected to travel below minute ((a)), even well below it - if price chooses.

But let's take one thing at a time and see if confirmation of a move lower begins to occur.

Have an excellent start to your evening.

TraderJoe

One of the Market's most Frustrating Tricks

We said that the upcoming Minor B wave could literally be any corrective sequence. This includes a zigzag, or multiple zigzag, a triangle or a flat. Like it or not, one of the market's most frustrating tricks is to make a flat wave. Let's first examine this excerpt in the ES 4-Hr futures from the March 22 bottom.

ES Futures - 4 Hr - Flat

If you examine this chart closely, after the first five-waves-up, you can see the three-wave structure, down to a, the three-wave structure up to b, and the five waves down to c. Wave b 'just' nicks over the top. As much as one would like to prove anything in Elliott Wave work, would you like to prove-out to the extent possible that this is a flat? OK. Here are some key concepts.

1. It is wave ((5)) that is as long as wave ((1)), not wave b. One key measurement for an Elliott wave is that very often - when the third wave is extended - the fifth wave equals the first wave in length. This fits like a glove. In the above sequence, the third wave ((3)) is the extended wave.
2. One of the only ways an Elliott Wave makes five-waves down, as with c, without further waves lower, is at the end of a FLAT. (Another way is five-waves of a c wave in a zigzag or a triangle).
3. Without this flat, the down wave would not have exceeded the time of the up wave.

The analyst would normally expect the down wave to exceed the prior wave ((4)) low, except in this case - which is the case of the "truncated flat". The truncation calls for a stronger market in the opposite direction. You can see the gap up at 2,500 on the right of the chart above. Off it goes, and so far, price has not revisited this low.

Now let's put this chart in larger context.

ES Futures - 4 Hr - Flat in Context

So, the flat wave in the first chart, above, is minute wave ((ii)) of the Minor A wave above. The gap up is in the third wave. If the flat is wave ((ii)), then the running triangle is wave minute ((iv)) for alternation. After the fifth wave up of Minor A, then it appears we have three waves down as (c) = 2.618 x (a) with dead-on Fibonacci ratios.

And since that time, we have had three waves up. The waves are currently unlabeled. Could these three waves end here? Yes, they could to start a multiple zigzag lower. But, if there is a gap up Sunday night, then they could also continue back to the high, or near to the high (90% by EW 'rule') to make the minute ((b)) wave of a FLAT wave, to be followed by a likely minute ((c)) wave down to end Minor B.

Such a flat wave could go over the top and even make an expanded flat lower, to give the down wave more time and more length than the current 23% retrace.

The market knows were watching, and it is dragging things out in the correction as much as possible. That's what corrections do. It is interesting that the EWO is about as flat as a pancake here. Is it possible the market is getting ready to do another one of its most frustrating tricks?

Have a good start to your weekend.

TraderJoe

Double Gap Fill and Fall Off

Yesterday, we noted how no gaps were filled. We also clearly stated and showed that the minute ((x)) wave didn't have to be over yet. Not to disappoint us, the market gapped up at the open, and traveled higher until it back-tested the Minor A wave up trend line again. Readers of this blog should plot a four-hour chart of the ES futures to see just now precisely this occurred.

SPY - 15 Min - Gap Fills

In doing so, the gap at the black dashed line was filled, and the minute ((x)) wave attained the 78.6% Fibonacci retrace level rather precisely. Then, prices began moving downward in a whipsaw fashion to fill the opening gap, shown by the black circle, and ultimately close below it. Because of the settlement price, the daily ES confirmed the loss of it's slow stochastic reading again.

Because the minute ((x)) wave did not attain the 90% level, we can not (yet) classify this wave as a flat b wave. We must follow the rules. Therefore, we are holding to the multiple zigzag classification of the down wave for the time being. So, one should then also draw a new parallel between the top, minute ((w)) and minute ((x)) on the hourly SPY chart. The first sign of a flat wave - or something larger upward - would be if that parallel was broken to the upside.

This chart was added after the close. It is the best alternate I see. The purpose is to give the minute ((a)) wave of Minor B more downward length.

ES Futures - 1 Hr - Potential downward Diagonal for Minute ((a))

 The pattern looks more weird on cash than it does on the futures.  Wave (v) would need to become longer than wave (iii).

Have a good start to your evening.

TraderJoe

No Gap Fill Yet

Because of today's gap-up wave, and subsequent follow-through higher prices, we relabeled yesterday's three down waves as (c) = 2.618 x (a), making a minute ((w)) wave at the low. The SPY chart, below, shows this clearly.

SPY - 15 min - Double or Triple ZZ?

Remember, we are trying to count a Minor B wave downward. It can have literally any corrective structure. So, it could be a zigzag, a double zigzag, a flat, a triangle, or some ugly combination wave.

Thus far, we are labeling it as a double zigzag, and we will revise the channel on longer term charts. The minute ((x)) wave, upward, does not have to be over yet.

Yesterday, we noted "wave (iv) did not have to be over." Even though to the letter of the 'rules' it doesn't have to be over, yet, it certainly does not have the "right look". So, we are providing the revised chart as above.

The kind of count we are showing above flies in the face of those uber bears who were immediately expecting a crash - citing only "three waves up". With five waves up to minor A, we were only looking for a corrective wave down. So far, that is all that has occurred.

After the futures close I added this chart.

ES Futures - 4 Hr - Only 0.236 Retrace So Far

 

Have a good start to your evening.

TraderJoe

In a Hurry

There was a previous gap on the chart, shown by the orange dotted line. Prices today were in such a hurry to get lower that they "gapped through the gap" - leaving both gaps in the SPY 15-min chart below technically unfilled.

SPY - 15 Min - A 2.618 Wave

Yesterday, I did a lot of counting on the ES E-mini futures, and you are welcome to view those charts in yesterday's comments section.

Today, just to be easier on the eyes, I thought I'd show a cash index - the SPY. Besides the gap through the gap, you can also see that the downward wave (iii) was a 2.618 extension. If it makes a lower low tomorrow, there will be five-waves-down. I have been showing an expanding diagonal on ES futures. If there is a lower low on the futures below today's low, then it will likely mean the 'whole wave' is just the whole overall expanding diagonal, lower. Hard to tell without counting waves through the night. I'd rather get some shut-eye.

There are no counting guarantees. Wave (iv) does not have to be over yet. It could be. Right now it is a very sideways looking wave and takes more 'time' than wave (ii). And, then for this count, wave (v) must make a new low.

Note, there are not 120 candles on the chart for this wave, yet, so the EWO does not have to come all the way back to the zero line.

Have a good start to your evening.

TraderJoe

Lower High, Lower Low Day

Friday's "hanging man" style candle played out today with a lower high and a lower low. It is possible, but not at all confirmed, that the minor A wave is completed at Friday's high with five non-overlapping waves up.

ES Futures - Daily - LH & LL

Price is still above the 18-day SMA and so the bias remains up. Further, the daily slow stochastic remains embedded. This should watched for signs that it travels below the 80 level. Then, it is possible price and the 18-day SMA might try to come together.

Have a good start to the evening.
TraderJoe

The Daily Dow with Some Degree Considerations

Here is a look at the daily closing Dow along with some notes regarding many of the degree considerations. Only the closes are used so that the form of the waves is more apparent.

DJIA Cash Index - Daily - Closing Prices

The bottom has tentatively been labeled as Intermediate (1), knowing full-well the alternate is that it is Intermediate (C). For chart clarity only single parentheses ( ) are used for minute waves. Symbols 1 - 5 and A are minor waves.

Have an excellent rest of the weekend.

TraderJoe

Extended First Wave x(i)

Yesterday evening, as the overnight futures were popping on the new guidelines related to the virus, we said the better count was that of an extended first wave, and posted the chart below.

ES Futures - 4 Hr - x(i)

If this is the case, then wave (v) must remain shorter than wave (iii), but because wave (iii) has a lot of length to it, then it is possible for wave (v) to throw-over the wedge line and possibly even fill the next futures gap up on the chart.

After the evening pop, there was an approximate 50% pull-back to fill a gap in the futures left by the announcement. Then. there was a spirited rally at the end of the day which nearly regained the futures high, but not quite. The wave count does not appear quite done to the upside at this point, but regardless, 2,821 is the level to watch, as below it would seem to turn around the shorter term trend.

Have a good start to the weekend.

TraderJoe

Diagonal and Range-Bound Correction

In order to comply with degree labeling, the only downward wave count is that of a diagonal as shown in the ES 30-min chart, below.

ES Futures - 30 Min - Diagonal & Correction

Wave v is lower than iii, wave iii is lower than i, wave iv overlaps wave i and is shorter than wave ii. The kicker once again is that wave ii is the largest retracement wave on the board.

Following the diagonal there is a range-bound correction within the 62% retracement. It may or may not be over. The last wave up is very, very choppy so the 2,765 level needs to be watched closely.

Have an excellent start to the evening.
TraderJoe

Indicators Seem to Have Rolled

In the ES 2-Hr chart we showed yesterday, the indicators seem to have rolled lower with lower lows. Today, also made a daily new price low versus yesterday.

ES Futures - 2 Hr - Indicators Lower Lows

There is one way we can count a still continuing diagonal, upward. Wave ((3)), above, becomes ((1)); wave ((5)) becomes ((3)); today's low becomes wave ((4)); and a new high or failure becomes ((5)) of C. The daily slow stochastic is still embedded, and price is over the 18-day SMA and so has positive bias. Therefore, we can not yet positively rule out this potential alternate. However, this scenario would invalidate if price got below 2,738.50 prior to making a new high.

Because the indicators have rolled, as above, and because the RSI is not yet in oversold territory on an intraday chart, the alternate above likely has lower odds. But, there are weekly unemployment claims tomorrow morning - and that could drive some volatility.

In the futures, it would be nice to see one more lower low below today's 2,751.25 low to make a clean impulse, before starting a more corrective wave, upward.

Have a good start to your evening.

TraderJoe

Awful Count - All Eyes are on It

The market keeps overlapping in its upward progress. So far, the futures are shy of C = A.

ES Futures - 2 HR - Nearing C = A

On this two-hour chart, besides the numerous overlaps, there are also divergences noted besides the sheer 'choppiness' of the waves. Further, the C wave is growing even 'longer-in-time' than the A wave. As far as I can tell, wave ((5)) would invalidate beyond 2,902.

On the daily chart, the slow stochastics are still embedded - as they were yesterday. And the upper daily Bollinger Band is above the market (not in contact with price at this time). Lower low days are still required for confirmation of any price movement lower.

Have a good start to the evening.

TraderJoe

Higher High, Lower Close

Today's price action is not too much of a mystery. Overnight, the futures popped briefly, ran into the resistance of the upper daily Bollinger Band, and the "Smart Money" took some profits there.

ES Futures - Daily - Upper BB Resistance

Prices in the ES fell off to close lower. However, the daily Slow Stochastic embedded today. When price made it's intraday low today, it did not take out the low of the prior bar, so a full outside reversal day was not made.

As discussed in the comments for yesterday's chart, there are still ways to count upwards - as a potential triangle, and there are ways to count downward. Today was very whippy and we counted valid structures in both directions. They are not resolved yet. Bottom line: lower daily lows are needed to begin a downward count. And higher daily highs - without a full reversal candle would continue an upward count.

Again, a completed top can be counted. But, downside follow-through is needed for better confirmation.

Have a good start to the week.

TraderJoe

One Partial Answer

I wanted to post this video as a partial answer to the two questions posed yesterday - and in particular the relationship between the FED, the economy, asset prices and debt.

When you get towards the end of the video, you will hear a lot about networks, and the certain type of exponential growth they enjoy. This endows entities like Microsoft, Google, Facebook, Netflix and Apple with a certain monumental profit over time that harder industries can not accomplish. I think one bridge to a brighter future might be a "network tax". 

If you think of a "network" as a "utility" - like the gas company or the power company- then perhaps a portion of their revenue should go to the public good, such as infrastructure, health, etc. and to prevent them from becoming "too powerful". Well, mull it over.

This is the third post this weekend. If you have not seen the previous two, you may wish to have a look at them.

Have an excellent rest of the weekend.

TraderJoe

Two Questions

Just a couple of thoughts for you this weekend to put a couple of items in perspective. The first question is this ...

DJI Cash Index - Monthly Close - Since 1932

The second question is this ...

Public Debt - US - $24 Trillion

The first question is about "equity", and the second question is about "debt". They are both ways to raise money to finance a business or a purchase. That's all.

This is the second post this weekend. If you have not seen the first one, yet, you may wish to review it.

Have a good rest of the weekend.
TraderJoe

The Wedge Count

Today's higher highs came on the additional actions by the U.S. Federal Reserve. However, on the ES 2-Hr chart, below, they are diverging (currently on the Elliott Wave Oscillator), and the majority of the day's volume is classified as down volume, not up volume.

ES Futures - 2 Hr - Wedge?

So far, if this is a Minor C wave up, then it has taken more time than the Minor A wave, up, as well. Wave minute ((v)) of C can be classified as over in one count we posted today, or it could have one more spike higher.

Bottom line, today, was that 'significant' down movement really didn't start today yet. If this is truly an ending diagonal C wave, then it would be expected to retrace all of Minor B in less time than the C wave took to form.

Have a good start to your evening, and to your long weekend.

TraderJoe

Marginal Higher High

Today made a marginally higher high wave, and then fell off a bit. In order to count the wave degrees properly, this hourly pattern on the ES futures would appear to be best described as three-wave sequences.

ES Futures - 1 Hr - Potential E-D for C

Wave minute ((ii)) was a 38% retrace. The up wave on the 5th to the 7th is likely not a five-wave-sequence because the middle leg - shown above as iv to v of (a) - would be "too short" for a third-of-a-third in comparison to the waves immediately preceding it, and after it. It is worth mentioning that two of us arrived at similar conclusions independently.

Have an excellent start to the evening.

TraderJoe

ES Futures - 5 Min - FED Induced Impulse

Here is the alternate count that might finish the diagonal.

Adding the chart with the FLAT possibility. But, as a diagonal, it was exceeded in less time than it took to build

Whippy Day

The easiest way to explain what happened today is with reference to the daily chart of the ES futures below. Price gapped up overnight - as was expected in a continuing C wave higher (from yesterday's chart). But, the gap up actually "gapped up and over" a previous price gap shown on the price portion of the chart in the black circle.

ES Futures - Daily - Whip around

Price continued to head higher until it ran into the upper daily Bollinger Band shown on the chart, and then, because a gap-over-a-gap would not have filled that gap, then, with the daily slow stochastic in over-bought condition, the "Smart Money" at least took some profits into the upper daily band. (They may have sold more aggressively, but they at least took some profits.)

Is the up wave enough for a C wave higher? It is. Is there any conclusive proof that price has started lower in a meaningful way. No. There likely isn't. Although today is a Tuesday reversal, and has the look of another weak gravestone doji, there is no confirmation. Even from the daily chart, such a candle should be followed by a significant closing lower candle to better confirm the doji. Secondly, a close again below the 18-day SMA  and below 2424.75 would still be needed to even negate the current uptrending SwingLine.

If, on the other hand, price catches a meaningful bid on the 18-day SMA, then it is possible to make a more complex correction upward. Let's see how it goes.

P.S. I sent a copy of the potential large ending diagonal structure that may have ended in February to Todd Gordon at Ascent Wealth Management. That count, which none of their team has contemplated yet, is at this LINK.

Have a good start to the evening.

TraderJoe

FED Wins Half the Battle

In an earlier blog post we discussed a minimum configuration for the end of "five waves down". (You can see that post at this LINK). We continued to count for an impulse wave, as that is what Elliott theory tells us to expect, first. With last night's overnight gap up, and today's higher high the case for an impulse wave, lower, got severely less probable. Could one still happen? Yes, but the odds are much, much, lower. Please review the chart below, and I will explain.

ES Futures - 4 Hr - Diagonal

Taking as many factors as possible into consideration, it appears a diagonal count lower fits best for an Intermediate wave, lower. The factors are these: a) Minor 5 is shorter than Minor 3 in time and in price, b) Minor 3 is shorter than Minor 1 in time and in price, c) wave 4 is shorter in price than wave 2 and overlaps wave 1 without exceeding the end of wave 2, d) each of Minor wave 5 and 3 have divergence on the Elliott Wave Oscillator, and e) any reasonable parallel has now been broken to the upside. 

So, the only factor that did not work out in a pristine manner is that wave Minor 4 is slightly longer in time than Minor 2. Well, that is typically viewed as OK in Elliott wave work. But, one of the key considerations is that Minor wave 2 is the largest upward wave on the board. Unless it were part of a triangle - a solution we tried - it would be a degree violation. And, the fact is that the wave is now part of the triangle's cousin - the diagonal. We explained in a previous post how the patterns are cousins because the three-wave sequences can fit into either - given the right circumstances.

Thus, the potential degree violation for this wave 2 is worked out. I fully admit I did not catch the exact the diagonal at the time it formed. But I was looking for upward waves to A, as the minute ((c)) waves of Minor wave 4, and they occurred. Last night, the impulse count said there should have been a downward wave. There wasn't. That results in the diagonal count.

Don't think it's a diagonal? Put yourself in the shoes of a pure bull who is sure we are going over the top again. Nothing would better fit that bill than to have ended a Intermediate (C) wave down as a diagonal.

But, you know diagonals, They could be ending or leading. In a Leading Diagonal wave 5 can not fail. It didn't in this case. That makes the odds about 50:50 from here - purely on the basis of a wave count - as to whether we go over the high again or not. 

For now, though, we need to see how this retrace wave progresses. It could have surprises. If there become only three waves up, it could easily go under the lows again. Remember, this whole FED Intervention process with the threat of QE Unlimited is specifically to do their best to fool the wave counters. 

So, get some sleep and have a good night.

TraderJoe

Battle at the 18-Day SMA - 2

It should be abundantly clear from the partial daily chart of the ES E-Mini S&P Futures, below, that, for the last six-out-of-seven days, price has contacted the 18-day simple moving average (SMA) shown as the red curve. Today was one of those days.

ES Futures - Daily - Battle at 18-day SMA

Prices today initially traded higher overnight, then lower, but ended the session closing just under the 18-day SMA. With the close under the 18-day SMA, the local price bias remains lower.

Also on the chart, I have also shown the current SwingLine function since the Minor wave 3, low. This is the black line. Of interest is the portion to the right of the (b) wave. This portion of the chart has both a "higher high" and a "lower low". These are shown at  the arrows. This is a neutral pattern and not a trending pattern. A trending pattern would be higher highs and higher lows, or lower highs and lower lows.

However, with today's slight higher pattern the SwingLine has briefly turned up. This has a significant implication.  IFF (If and only if), there is a new low below 2424,50, before there is a new high over the previous wave 4 high, then this would turn the SwingLine into "Trending Down". Why? That is because there would be lower lows and lower highs and they would be under the 18-day SMA.

If this occurs, it would likely indicate with a much higher degree of confidence that wave Minor 5 was underway. Note that even if the current Minor 4 was exceeded higher, it could not start a trending SwingLine pattern higher, because then there would just be the current lower low, and then the new higher high - which is not a trend in the SwingLine.

Sunday-night to Monday-morning may help resolve the current neutral state of this indicator. Let's see how it goes.

Have a good start to your evening and to your weekend.

TraderJoe

Lower Low Day - 2

The futures made another lower low day today based on the latest unemployment claims filed. That lower low made five-waves down in the futures - which is currently seen as the minute ((i)) wave of Minor 5, lower. This is shown in the half-hourly chart of the futures below, and wave minuet (v) of minute ((i)) occurred on a divergence with the Elliott Wave Oscillator.

ES Futures - 30 min - Minute ((i)) Completed

At that point, a rally began but it occurred in only three waves, with c = 1.618 x a to the pip.  We waited for a clear fourth wave, and a higher high to happen without overlap. It did not.

There was then a three wave down move in a channel, which was a zigzag, and in which the b wave of the a-b-c move was a Flat. The c wave proceeded in an unmistakable non-overlapping five waves lower. At that point, there was another rally that broke out of the channel and may be counted as a five-wave sequence. You are free to check the counts from the short-term 5-minute chart below.

ES Futures - 5 Min - Structure From Minute ((i)) low

Thus, it would seem that a structure like this is trying to form a double zigzag, upward, or perhaps a larger flat wave for the minute second wave of wave Minor 5, down.

As you can see from the first chart, minute ((ii)) - if it ended here - would be 'very' short in time compared to minute ((i)), so we don't think it has ended here, both because of the length of time, and the current upward count. And, so far, the upward wave has retraced less than 50% of the downward wave.

Well, it's a correction, and the market is doing its level best to confuse. 

Have a good start to the evening, and let's see what tomorrow's payroll employment report entails. Rest up.

TraderJoe

Lower Low Day

Yesterday, we looked at the possibility of concluding the fourth wave up with a diagonal. But, we specifically said,

"We suppose something like this might be occurring with the Minor 4th wave, but it remains to be proven."

We even drew dashed lines on the chart to indicate that their positions (especially the lower one) was flexible. With today's lower low day, the diagonal possibility was both disproved and formally invalidated. We let readers know in the comments when it did invalidate. The lower low day showed virtually no 'inflows' into the market on the first day of the month. It turned the Swing Line lower, and again set price below the 18-day SMA, or 'the-line-in-the-sand", thus setting the daily bias to negative as well.

ES Futures - Daily - Swing Line and Bias Down

What set the market on edge overnight was the revised expectations for the virus. Buyers pulled their bids on the news.

For those wishing to know how the fourth wave ended, as I noted in the comments, I could only conclude that price finished the upside five-wave move with this ugly, but legal, triangle.

ES Futures - 2 Hr - Ugly Triangle

Price is now below the e wave of that triangle, and also traveled below the c wave. And, hopefully, this example will serve to show another reason why triangles and diagonals are "cousin" patterns. The three-wave sequences in each can be interpreted for either, until one or the other is proven.

Well, let's see how tomorrow goes. Have a good start to your evening.

TraderJoe