So They'll Never Know

Today we were counting the fifth wave up in an hourly ES impulse, and that occurred until approximately 10:30 am and a price of ES 7,605. The up wave took 49 hourly candles to build. Then, at about 10:30 am a fully 55-point downdraft bar occurred which was a clear stop-runner. Checking an amalgam of newswires, you won't see that "minor excursion (sic?)" explained anywhere. It 'might' have had something to do with POTUS not signing a housing bill, or with the SK Hynix debut, or with the Iran war. No one on Wall $treet apparently owes you an explanation. They won't tell you, and you likely will never find out for sure. The hourly chart of the ES futures showing this bar is below. One thing we know is that in the futures, it went down to overlap bar xi and so likely starts a new wave.

ES Futures - 1 Hr - Five Up & One Bar Down

Of course, being Friday, the machine nanobots bought the bar and squeezed it like there was no tomorrow to make a new higher high. So, psychologically, "mom & pop" and most casual investors will never know the situation occurred unless they may have had a stop hit. All most people will know is stocks closed higher on the day and when they check their daily bars on a chart nothing will look out of place, a high near the high of the daily candle.

Oddly, today we had a discussion on the blog about proportionality in wave counts. So, over the last couple of days, we've had 49 bars up, and only 1 bar down?!! That just seems extremely unlikely, but there it is. The market can try to make restitution if the up wave following the bar is a "b" wave, up, and there is a "c" wave down to follow. Maybe, and likely. Not guaranteed.

Regardless, not only the speed of the recovery, but the complete lack of explanation seems to make the situation just another incident in the never-ending Ponzi scheme of leverage driving this market. The problem is you have to find someone who gives a flying flip. The biggies are passively in this thing, and they literally do not care as long as prices are up. It feels like the leverage is getting more & more extreme. At some point, the leverage will be seen to revealed for what it is. 

Maybe later we'll have more to say about the wave count. Like I said, nothing in the down direction will surprise me. I just can't help wondering about the financial professionals and what they are thinking. Do they see no value whatever in letting some gas out of the system slowly so that it doesn't all come out at once? I guess not.

Well, no one ever blamed the keepers of the keys with exercising judgement that was too good.

Have an excellent start to the evening and the weekend.

TraderJoe