Outside Day - Up

Today's FOMC meeting provided the impetus for an outside day up, candle, in the ES daily futures shown below. This was not so much for the expected one-quarter percent interest rate cut, but also for the $40 billion surprise announcement of cash-management T-bills to be purchased ahead of schedule. Of course, the banks can figure out a way to use that money, and stock prices rose. This was not much of a surprise as prices were still over the 18-day SMA and the daily slow stochastic was still embedded.

ES Futures - Daily - Outside Day Up

In the process, the prior up (green) fractal was exceeded higher. As with all outside day ups, the low of the day should not be taken out lower within two days or it would be a trap for the bulls.

The wave count is almost entirely indeterminate at this point. A new all-time high is needed for the expanding triangle option we presented which can be seen at this LINK, and it is still a valid possibility. But a compound Flat is also possible - whether the high is exceeded or not. And, that count, too, can make a lot of sense. There are just times in a wave count when one has to be patient until the count clears. This is one of them, and so we need to pay attention to the local technicals.

IF the market continues higher, then the upper Bollinger Band becomes the next target. Still, stiff retraces are possible at any time.

Have an excellent start to the evening,

TraderJoe