Cobbler

Like the shoe repairman that tries to save a worn-out pair with new soles, or even more like one of your favorite Savannah, GA peach deserts, I have tried to cobble together the count from what was lying around and available for use - segments we counted earlier. Using the ES 8-hr roll-over contract - the one that is most actively traded - provides this possible view of a barrier triangle. At least it does at this time.

ES Futures (Roll-over contract) - 8 Hr - Possible Barrier Triangle

Friday's up wave is so close to nicking the high that we must allow that it might. If it does, then, it might be a second zigzag upward of the double zigzag w-x-y count to the minuet (d) wave of the triangle. And, this wave may be allowed to go over the top, again, within certain limits.

From this high, it is perhaps possible to make the (e) wave of the triangle, which probably (not certainly) would take out the prior x wave lower. Notice the (c) wave, lower, only retraced a little over 62%, so something similar should be expected for the (e) wave. From there, the minute ⓥ wave top should occur as an impulse or as a diagonal to end the Minor C wave, up.

Now, notice the pattern on the Elliott Wave Oscillator (EWO or AO). You can see the contracting lines across the peaks and valleys and fairly tight hugging of the zero line overall that typically signal a contracting triangle.

If the triangle validates, with a higher high after the (e) wave, it might signal "the last wave dead-ahead" for this index. And, often, not always, the thrust out of a barrier triangle is sub-par. It might not travel the typical technical analysis target of "widest-width-of-the-triangle-added-to-the-breakout-point". It might. But it might not.

We have been looking for a formation that might signal the end of the monthly contracting diagonal, and this might be the start of it. Time will tell. And, yes, the current position shown of the C wave is just a placeholder. It is possible that Goldman & Co will try to drive the market to their 8,000+ target, which would be a Fibonacci number of 8 x 1000. But it might not get there, either.

So, why the barrier triangle? The compression of the triangle is trying to shorten up the minute (e) wave, and thus all of the minute fourth wave triangle to be more equal in price to the minute second wave which was a fairly small wave. Remember triangles are always measured, pricewise, to their (e) waves. And yet the triangle would show huge alternation in time with its second wave, as shown in the daily chart, below.

ES Futures (Roll-over Contract) - Daily - Barrier Triangle

Again, right now we don't have any overlapping waves (in terms of minute ⓘ) to play off of. So, it still follows the 'rules' to call this a fourth wave overall. There are alternates from here. We could have topped but the odds of that grow lower with the higher highs. And it is possible a final upward contracting diagonal is being constructed to drag this thing out into oblivion. But we'll deal with these possibilities if and when they seem to take over the count.

For now, have an excellent rest of the weekend,

TraderJoe