There is Now a 1.618 Wave, but, but, but ..

As the ES 4-Hr chart below, shows, there is now a 1.618 wave downward wave. But, but, but ... there is an overlap in the fifth wave, (v). This suggests that if the fifth wave, (v), is a diagonal, that the retrace waves could target over the prior (iv)th wave.

The 1.618 extension was something I called for in real time on the blog. Well, it seems to be here, but because of the overlap it simply can not be a third wave. Third waves can not be diagonals.

But, but, but .. there is a version of this count which can make the whole structure a contracting leading diagonal. It would be counted this way.

This version of the count is much less proportional and would invalidate below a certain level. Keep your eye on the length of (v) versus (iii).

There is an even larger version of this diagonal which places (iii) at the very low, and up wave overlap is still required. Possible.

The issue with the x(v) count AND with the contracting diagonal count is that deep retraces are possible. That's fine. If they happen, they happen.

But, but, but,,there is one version of the extended fifth wave count that has a shallower retrace.

It is still an extended fifth because it is longer than (iii) but, but, but .. there would be a flat wave currently under construction. This view might align more with where the 18-day SMA is currently located. 

The bottom line is this: this is a time for maximum flexibility and patience if you can muster it. We can see different scenarios. In other words, this whole wave can be ((a)) at the minute degree, OR it could only be wave (i) of ((a)) at the minuet degree. I will look for ways to try to sort it out.

But this is what an Elliott analyst does. Remain open and flexible and do your best to count the waves on the way up. I'm telling you that if we are making a diagonal lower, the expanding variety is one of the most difficult to count at every twist and turn.

Have a good start to your day,

TraderJoe