Watching for Activation

According to the daily ES chart, below, the wave count has been proceeding pretty much as anticipated given all the number of diagonals to fit into the picture and to figure out how they alternate.

ES Futures - Daily - Watching Prior Low

The wave degrees are noted in the chart. We are watching to see if either the expanding triangle or the expanded flat gets activated by prices moving below the low of the prior minute ⓒ wave this week or next. If it does, then the pattern becomes a matter of the length of the wave down because so far - from a time standpoint - this down wave has already consumed more time than the prior ⓒ wave which is what is classically expected in an expanding triangle.

We will note that tonight price filled the up gap in the futures from 25 Nov 2025 if you look back to the left. Still, there is a gap down tonight, and a gap down from 27 Feb 2026.

The daily MACD is currently headed lower, and the 200-day simple moving average in the futures has been tagged or broken, depending on whether one is using the lead-month contract or the roll-over contract. Further, price has broken the lower daily Bollinger Band for the second day and tagged the weekly one.

So, one might look for signs of the Smart Money to take profits on shorts near the bands, maybe letting some ride, and this may create some whippy action in this area.

P.S. I would put a wave-counting-stop (brown w.c.s) above the wave labeled (b)/(ii) as an indication that a different count is playing out.

Have an excellent start to the evening,

TraderJoe

Hourly Parallels

The whip in the ES futures is on in full force. Here are a couple of hourly parallels for your consideration. 

ES Futures - Hourly - Parallels

The wave structure up was a three-wave sequence. The wave structure down is in a parallel and might also be a three-wave structure or a complex in the futures. This makes prediction of the wave structure very tenuous. While it does feel like we might be in the minuet (b) wave, further confirmation of the form is required.

Today price finished in the middle of the range but still well below the daily 18-per SMA. So, the bias remains down at least temporarily. It can't be said often enough - calm, patience and flexibility are key requirements for this period of time.

Have an excellent start to the evening,

TraderJoe

Until Today ..

Until today, the lengths were not correct. Yes, everyone recognized the whippy, range-bound, overlapping nature of the wave-count. But, until today, the waves were not long enough to call the down structure an expanding diagonal, as in the ES 12-hr chart below. This is the case only in the futures and not in the cash market. The SPY contract has too many waves missing from the count.

It's an odd timeframe to have to be charting or even following. Yet today we can see that a fifth wave, v, is longer in price and time than the third wave iii. So, this could mean that if price is making the expanding triangle downward, then this wave could be the minuette (a) wave of the minute ⓔ wave yet to come of the Minor B wave.

Again, we don't know that that is the case, but its likelihood is growing every day. The downwardly biased chop feels like a diagonal grind. And, today, prices again overlapped upward which is hard to explain using pure impulse structures. We also know that prices got down and through the lower daily Bollinger Band on this contract - where the Smart Money likely lightened up at least some of their positions - and prices did not quite make it down to the 200-day SMA.

So, again, because of the whip & the chop, please be patient, calm and flexible. 

Have an excellent rest of the evening,

TraderJoe

Most Wedges

Most wedges - so the theory goes - break around the 80% mark if they are going to break. Applying this rule-of-thumb to the SPY daily closing chart, shows that this closing price wedge may have broken around that level.

SPY Cash - Daily Close - Wedge

To apply this rule, you extend the proposed wedge trend lines to the apex and use a Gann Box to subdivide the linear length of the wave. The red up arrow shows where the 80% mark is located. While this chart doesn't prove anything, the closing back-test of the wedge is certainly interesting. The reason that nothing yet is proven is that while there are lower closing highs, there are not lower closing lows. There certainly could be, but we remain flexible, calm and patient.

The Elliott Wave count remains highly uncertain at this point. IFF (if and only if) there are lower lows the February high can be Minor A, minute ⓑ of a large, expanded flat, or minute ⓓ of an expanding triangle as we have discussed on this blog earlier. The answer to that puzzle will likely depend on the extent and internal count of any potential downward movement.

And IFF there is a downward count started then it might be starting like the following, meaning it would be great if it started with an impulse wave per this hourly chart on the SPY cash index.

SPY Cash - Hourly Close - Impulse Started?

The current wave count down is highly dependent on the Monday trading hours, which could be a mix of war news and the regular monthly passive inflows impact on the market. For example, it could be there is a complex wave ②, up, which is building or in place. So, we need to see what things looks like when the cash market opens.

Until then, have an excellent rest of the weekend,

TraderJoe

New Fractal Break Needed

A lot of words could be expended, but - at present - the reality of the situation on the ES daily futures is that a new fractal break is needed.

ES Futures - Daily - Compressing

Right now, the pattern is compressing. It could break up as a triangle, or it could break down as a diagonal.

We're just giving things lots & lots of time to play out. So, calm, caution and flexibility remain the operative themes until the market gets more directional.

Have an excellent rest of the evening,

TraderJoe

Three-Wave Sequences

Tonight's market has a small gap down (shown as a red circle), which may be related to re-imposition of the 15% tariffs after the Supreme Court invalidated prior tariffs imposed. This is seen below on the ES 30-min chart, the intraday wave counting screen.

ES Futures - 30 min - Potential Diagonal

The up waves prior to the gap down count best as three-wave sequences. So, since there is a possibility of an upward contracting diagonal (either leading or ending), then the measurement on the right shown at 6,877.50 becomes important. That is because, below that level, a fourth wave of a contracting diagonal would become longer than its second wave.

Then, if a fourth wave holds, the fifth wave should not become longer than the third wave.

Let's keep an eye on the levels and remain flexible, patient, and calm until the market gets more directional.

Have an excellent rest of the evening,

TraderJoe

Some Rejection

US equity prices as measured by the ES daily futures made a higher high day today as in the chart, below. Prices got up very near to the 18-day SMA where they formed a triangle that we warned about in the comments for the prior post. The triangle was a barrier triangle and, often, these have a mediocre thrust out of them - because of the energy spent by the market to bust the barrier (or so the theory goes). This one did.

ES Futures - Daily - Some Rejection by the 18-day SMA

Regardless, prices experienced some level of rejection near that average and backed off a bit. If this up wave, so far, is a three-way sequence, it suggests placing a wave-counting-stop above today's high.  It's not that higher waves can't be made, but it would well mean there needs to be a different count applied whether it remains a three-wave sequence or somehow morphs into a five-wave-sequence.

Prices have closed below the 18-day average for four consecutive days, only meaning that the daily bias is still lower.

Have an excellent start to the evening,

TraderJoe