Short-Term Count (Updated) - 2

Overnight, the market gapped lower. When the cash market opened, it kept going although with less momentum. This was not unexpected. Towards the end of the day another more definitive potential divergence formed with the RSI indicator. The update of the ES 2-Hr chart is below. It has the suggested 120 - 160 candles on it per The Eight Fold Path Methodology, actually 119 to the futures close.

In the lower right we have indicated ((i))? for the possible minute ((i)) or circle-i location which is a direct hit on the mid-channel line. Note that the EMA-34 passes through all of the larger numbered waves indicating good form and balance to the count at this time.

IFF a minute ((ii)) wave begins in the next couple of days, it can traveled upwards from 38%. However, it should not become larger in price than the Minor 2 wave. Minor 2 is located at this location in the Dow Jones Industrial Average (chart at this LINK), and it is located at the 2 June high in the upper left in tonight's posted chart update. Readers of this blog should do the calculation as to how many points in their favorite index is permitted.

Why do I suggest such? Because some people just need to do the work of Elliott Wave. EW is not just counting from 1-to-5, or putting your favorite letters on a chart. It is about understanding the size of each wave, the momentum shown in each wave, the impulsiveness versus choppiness of each wave and fitting these to the rules and guidelines in the wave principle. When you put these all together, then besides a valid count, the clear invalidation levels will stand out like a sore thumb. And these can be useful in setting stops vs. targets.

Have an excellent start to your evening.

TraderJoe