Proportions

It's time to look at some measurements. The best downward count I can muster on the ES hourly futures is a c = a, without violating typical degree labeling. The way the wave started down off of the top was, and is, troublesome from the perspective of an impulse. We suggested that if the wave was going downward, it would be by diagonal. There does appear to be a small contracting diagonal off of the top, but it does not make for a very good parallel channel. Then, to make five waves down as an impulse, cash and futures should have made a new low. They did not. And - for a larger down wave at the onset of a move - it does not make good sense to include a truncation. So, we simply will not force a five-count.

Then, with the up move this morning, there is a 2.618 relationship of the third wave to the first, so far, also as a c = a. Those types of proportions typically take place predominately in triangles and diagonals. So, if we are going downwards in a Minor C wave, it might be by expanding diagonal. I would have preferred not, but the futures just don't show a good impulse at this point, and the retrace wave is almost 78.6% at this time.

So far, since the latest b wave, there have been ten hourly candles up, with no red candles. The last candle shown is a doji. So, to begin a down move, we must see some sort of reversal candle - even if it is only a follow-though down to the doji. That hasn't happened, yet.

If we are not going down, then the primary other way I see to go up further is with a triangle. But, I think that is a bit less likely at this time, so I will only address it if and when needed. So, we remain flexible. patient, and calm as approporiate.

Have an excellent start to the evening,

TraderJoe