From a wave-counting perspective, the Dow is the one showing the most stretched wave count, and it is the one to worry about going forward. Still within the context of an Intermediate wave (3), the count for an overall contracting diagonal is just about as full as it can get. Let's go over some reasons why below the weekly chart that follows of the Dow (YM) futures.
First of all, we said that if wave W wasn't divided into two waves, ⓐ and ⓒ, then current wave X (or alternative wave 2) would be longer in time than the prior higher degree wave in the same direction - Intermediate wave (2). This would seem to be a violation of degree definitions.
Second, within Y, minute ⓐ is equal to the minute ⓐ within W. And, still within Y, minute ⓒ equals its minute ⓐ at present.
Third, Minor Y is longer in time than Minor W. So, either the two waves are of the same degree or Y is one degree higher. Right now, I contend they are of the same degree.
Fourth, Minor Y is within 1.618 times Minor W. This is really up against the limits of a double zigzag in terms of price length.
And Fibonacci Fifth, the alternation pattern within the corrective sequence would be ⓒ of Y is an expanding diagonal whereas ⓒ of W is a contracting diagonal.
Yes, this is a bit of a bizarre pattern, but - make no mistake - it represents continued fiscal and monetary expansion pushing asset prices higher and higher.
Price has currently returned to the parallel shown. It is possible we can construct one bounce higher towards 44,000, but the risks are considerably more in relying on that than the reverse - that the current expanding diagonal higher will be retraced in less time than the diagonal took to form. And should price return to trading inside of the parallel, it will tend to indicate that the up move is expiring.
Have an excellent rest of the weekend.
TraderJoe