Final Wedge in the Larger Wedge?

On this chart, which is of the ES futures on the 2-hr time frame, there are about 167 candles, so far. And the pattern is even further wedging in the larger 4-hour wedge as shown by the dotted brown lines.

ES Futures - 2 Hr - A Wedge in a Wedge

More importantly, the Elliott Wave Oscillator is on a divergence from wave iii to wave i. Also, there are both second wave and fourth wave signatures on the EWO - most recently with the fourth wave below the zero line. Wave iii is shorter in price and takes 'less time' than wave i. And wave iv is shorter in price and takes 'less time' than wave ii. And, there is a clear overlap between wave iv and wave i. Wave ii is a 50% retrace. Wave iv would have occurred within a 160 candles guideline.

The pattern of a diagonal would indicate prices 'have come too far, too fast". It may end the Minor B wave, up.

Perhaps the pattern indicates that prices will rally into Mon/Tues with a reversal on 'turn-around' Tuesday. That is a hypothesis to be tested. Again, we are still looking primarily for a correction, as a Minor C wave down to follow.

The technical posture of the market is also of interest at this point in time. First is the put-call ratio.

CBOE Put-Call Ratio & Moving Averages

As the chart shows, both the 10-day and 50-day moving averages are at new lows for several years. They are both deep in the 'Zone of Speculation'. This suggests market risks are more to the down side then they are to the up side.

Next is the NYSE advance-decline line. We know this internal market measure is at a new all-time high recently. This is what suggests that any coming down move is likely a correction only.

 

However, recent moves up in this measure have been very hesitant, and there is some suggestion a recent trend line is breaking. Again, this could indicate a correction is nearing.

Please keep in mind, that while it is perfectly reasonable to expect the potential diagonal, above, to complete properly, it is also possible since the potential diagonal is a possible minuet (c) wave of a minute ((y)) wave of Minor B, that the diagonal fails to complete properly. We have absolutely no evidence of that yet. It is something to be aware of the possibility of.

This chart was added on Sunday, after review of the weekly. The measurement is certainly of interest.

ES Futures  - Weekly - At 1.382

The up move is now a 1.382 external retrace of the down move into March, 2020.

Have an excellent rest of the weekend.

TraderJoe