Inn & Out

Nvidia earnings are now "in" the market, and the ES 1 hr futures are "out." Throw the baby out with the bathwater. They are a mess - dreadful and with overlap. And we just wanted to count "five-up". So, here's the deal: we showed you the potential count several times on the SPY cash 10-min in the comments for the prior post. Here is that one-hour futures chart with all its issues.

We can clearly count three waves up, with a running flat second wave, as either i, ii, iii or the alternate of red a, b, c as shown below price and above the MACD. The dashed 0 - ii trend line is shown, and it was broken today. So, we are likely in wave iv but with a slight intraday overlap. One way around the overlap is if price makes a triangle and the ⓔ wave does not overlap. Barring that, we could either make a contracting diagonal with the up waves as red (i), (ii) as shown, or if that does not occur, perhaps we make a fifth wave and have to accept the slight overlap. So, we have to see how that turns out.

Note there is some prospect for sloppy weekend trade as some people are still on vacation. Friday could be a window-dressing day as the last day of the month. And then, Monday June 2 might see the typical 'first-of-month' inflows perhaps with a pop out of the triangle.

Time will tell. The MACD is currently hugging the hourly zero line and looks to be in a fourth wave position, or position for a whippy triangle around zero, but that is only one input to the chart. Touching the lower parallel was another, and it will be interesting to see if we get the repeated trend line breaks that triangles often bring.

Could the analysis be off? It could. If things really break down below today's low, then one might look for a much deeper wave (ii) of the contracting diagonal.

In any event, wave iii / c up is shorter than wave i / a, up and that tells quite a bit. Wave v should be shorter than iii if it occurs that way.

Have an excellent start to the evening,

TraderJoe