Gap Location

Yesterday, we showed the daily chart of the Dow with the Intermediate (W)-(X)-(Y) count inside of the Primary ((B)) wave. In prior comments, we suggested that there may be a triangle in the (Y) wave. If so, it is likely a triangle for the Minor B wave, given its size and some overlap considerations. Below is the cash S&P500 Index showing the same count including the triangle.

S&P500 Cash Index - 30 Min - Up Channel

Assuming the gap is in a wave three location, and if alternation is considered, then that seems to put an upper limit on the minute wave ((v)) of the Minor C wave. If the alternation is that wave minute ((ii)) is a 'sharp' or zigzag wave, then wave minute ((iv)) is a longer-in-time expanded flat - which makes excellent alternation. And so, if that is the case, then wave minute ((iii)) is shorter than wave minute ((i)), and so wave minute ((v)) would remain shorter than minute ((iii)). To do this, it should stay below the 3,852.2 level shown.

The alternate would have to be that (x) is actually minute ((i)), and the current minute ((iv)) is all of minute ((ii)). In either event, no downward wave count starts until price is below the channel and the current wave minute ((i)) location is overlapped. Today, that overlap missed in the cash market by less than 1 S&P point. In some markets (like the Dow) that location has been overlapped.

I would keep an eye out for the put-call ratio statistics when they come out later tonight or tomorrow. Yesterday, they were back down to 0.38 and it will be interesting to see what they are today.

Have an excellent start to the weekend.

TraderJoe