The Extended First Wave Count to Minor A - 3

On the daily chart not too much has changed with the recent hostilities. In terms of the wave count it remains the same, as below. Confidence has increased slightly because, over the last couple of days, a longer wave down has been made than the (e) wave of the triangle, and it traded below that level, as well. Since, triangles often precede the last move in a sequence, there is some greater level of confidence that a top is in place temporarily on the ES daily chart, below.

ES Futures - Daily - Minor A

This also means that the break of the wave ((ii))-to-((iv)) trend line (circle-ii to circle-iv) occurred in less time than wave ((v)), circle-v, took to build. Neely adherents will recognize this as the first step in the confirmation process. Trading below the (a) wave, and possibly filling the higher of the two open gaps would be a good second step.

We say - and we mean - confidence precisely because we are always just dealing with probabilities and odds. For example - at present - we only can legitimately count three-waves-down, so far, on the hourly chart shown below.

ES Futures - Hourly - Three Waves Down

Notice the very precise Fibonacci relationships where - at the b wave high - wave Ⓒ = 2.618 x Ⓐ, and at the bottom wave c = 1.618 x a. Again, this just reinforces three-waves-down in the futures. Then, for the up wave, notice that it is longer in price than the b wave, up. Therefore, it is either of the same degree or one higher degree. At present, we are showing it as one higher degree. However, IF it is of the same degree, then it is possible a triangle is forming (we'll deal with than one if Friday's low is not exceeded lower).

Then, notice the Elliott Wave Oscillator (EWO or AO) is really only showing a significant trough, a hump above the zero line, and another lower significant trough. So, this looks like only a three-down, with a flat for the b wave.

This does not mean it can't start a diagonal lower, but lower lows are needed to prove that case. And if a diagonal forms, then the five minuette waves down, (i) through (v), would form minute ⓐ wave down, because it would take three minute waves, ⓐ-ⓑ-ⓒ to form the minimum Minor B wave down.

The bottom line is more length in the Minor B wave is probably still necessary. Readers of this blog should also plot the daily Bollinger Bands with the 18-day SMA and daily slow stochastic to see that all we have been doing is "fighting the battle at the 'line-in-the-sand'." A close below that 18-day SMA is needed to be a more convincing onset to the correction. So, try not to rush the counts. There are only three-waves-down, so far. The bulls are technically still in control until they are not. Legitimately, the three-waves-down means travel over the top is still possible until / unless Friday's low is exceeded lower.

Have an excellent rest of the weekend.

TraderJoe