Watch the Embedded Reading

Monday's session ended with the ES daily slow stochastic below the 79 level at 78.90, and tonight the reading is around 71 - 72. The only day the market can gain back the embedded status immediately is for both the %K and the %D lines to close back up over 80 in Tuesday's session. This is not impossible, but it will take a large rally. The daily chart is below.

If the embedded status is not regained, it becomes more probable that price and the 18-day SMA will try to come together. As it stands right now the daily bias is still somewhat positive as the closing price was over that 18-day average.

Today - in the comments for the prior post - we said that any potential expanding diagonal upward invalidated in the Sunday night session. It's good to have that one off the table.

Whippy and grindy - as it is - this is my best estimate of the what the down and the up wave counts are in the half-hour ES/SPY (CFD).

ES/SPY (CFD) - 30 min - Count

The overnight waves, and those made in the cash session best count as a Flat wave, so far. There are two fourth wave locations nearby - shown by the blue box. But the lower low in the cash session may have been a tip-off.

In a perfect flat, the a-3 wave can be taken out and exceeded higher. If there is some overnight news or for some other reason (like a big whale gets the willies, or something) the flat can truncate. Don't put anything past this market. Attempt to count what you see.

Have an excellent rest of the evening,

TraderJoe