Local Degrees and Count - 2

For the ES futures today, we were expecting further up movement today both because we have counted a five-wave-down sequence on Friday, followed by one up wave, and because there appeared to be some movement on the government shutdown talks, let alone renewed called for direct government subsidies to individuals for tariff-caused inflation. Up movement did occur with a gap-and-grind scenario that left the market at the day's high in quite a strange manner. The wave in cash doesn't channel from Friday, it wedges currently.

The oddity of the wave, and the lack of retraces only suggested an alternate to the second wave up scenario and that would be the fourth wave, (iv), of a diagonal as below.

Please note that some of the terminals used to draw this potential diagonal are different than those used to draw the impulse. I need to note that this pattern has its significant drawbacks which is why it is only an alternate at this time. Some of those draw backs are the following:

• Wave c of (i) looks like three waves, but the 4-hr bars might obscure five waves.
• Wave (iii) is much longer in price than wave (i) when usually in a diagonal they are often very close in price.
• Wave (iv) is a very, very deep wave already.
• We don't know that upward price movement is over.

We show the pattern for completeness, and because the EWO was on a low on Friday's low. Hopefully, price movement will either validate it or invalidate it soon.

Have an excellent start to the evening,

TraderJoe