While none of us know the exact answer to this question, luckily our time horizons can be a bit shorter, and we can consider the ES 4-Hr (roll-over contract) chart below.
Here we see only a lower-high construction but not yet a lower low. An eventual lower low is likely even for a simple a-b-c scenario within a parallel (temporarily sketched in as blue dotted lines). The market opened with a gap up this evening. That gap has been quickly filled. Earlier this week and last, price twice stopped at the 78.6% downward retracement level. It is amazing how it does that to keep one guessing if a triangle is in progress or not. Upward speed lines from prominent low points have been broken lower as has been the prior down (red) fractal, showing reduced upward market momentum. The location marked :5 is also a down (red) fractal.
Price is currently below the blue EMA-34 on this time scale. Below it is negative, above it is more positive. The four-hour MACD is currently headed lower and is below the zero line.
Tomorrow is the first trading day of a new month, new quarter, new year and new presidential term. Still there would have to be 'quite' a swing around from the characteristic sources of beginning-of-the-month inflows to change the local character of the market. Could it happen? Yes. Just that the probabilities are lower.
For a nested 1-2-i-ii count the upper parallel sketched in should hold the wave ii. A local flat could be in progress as wave ii with fair odds.
Have an excellent start to the New Year!
TraderJoe
