Bouncing Around in a "B" wave

Our count presupposes that five-waves-up to a Minor A wave, up, has been made and is in the rear-view mirror as shown below on the left in the ES hourly chart. We are now bouncing around in the Minor B wave as given by today's false break-out higher and overlap lower.

So, we suppose that a (c) wave lower is underway, and this may dovetail with the reaction to the Payroll Employment Report tomorrow. Since sharply higher prices are still possible, say to the EMA-34 or so, provided we do not go over today's cash high, it behooves one to use the utmost caution reading these waves.

As we look at the daily chart below. We see that price did close over the 18-day SMA, and so the daily bias is still up. Price did rise to tag the upper daily Bollinger Band and then fell off in an outside-day-down. And both cash and futures technically made their highs on the same 'day' - just not the same hour of the day.

Price then went down near the 18-day SMA and bounced a bit. It is possible that if we make a (c) wave down that it is only "one leg" of a correction - like minute ⓦ of a complex ⓦ-ⓧ-ⓨ which could be something like a Flat-x-zigzag to help give the correction some length. Remember, "B" waves can be "any threes". And maybe on the daily chart such a correction would help form a better daily parallel.

This is one of the myriad possibilities for a B wave. A 'multiple Flat' would surely be another. Still, we are looking for a count that provides some downward length - and perhaps overlap - to differentiate it from other counts. So, we'll stay loose and flexible. The next milestone would actually be a close below the 18-day SMA to suggest that the daily bias has changed. The slow stochastic tonight is only around 77, and if stays below 80, it might indicate that price will again try to attack the 18-day SMA.

Only time will tell. For now, there are overlaps galore, and we are following the 'rules' as best we can. 

Have an excellent rest of the evening.

TraderJoe