Continued Triangle Count

Market Outlook: Still in Minor Wave 4, Lower
Market Indexes: Major U.S. Equity Futures were higher
Today's Candle: Higher High, Higher Low, Higher Close

The market as measured by the S&P500 Cash Index closed yesterday at 2446. The futures had been higher overnight, then turned lower. There was a very brief dip in the cash market down to 2444, and then prices immediately header higher. By 3 PM, the market reached 2460, and stalled there, closing at 2458.

Because of the brevity of the early morning down wave, and the ability to count another potential five waves upward, we labeled this morning's low as the ((B)) wave, circle-B, of the potential triangle's y wave of the overall minuet (c), and the swift upward move as the potential ((C)) wave, circle-C of y of the overall minuet (c) wave of the triangle. The hourly chart is below to refresh your memory.

S&P500 Hourly Cash

At the end of the day, price came back down to cross back over, or overlap downwards, the w wave of the triangle. This is not yet fatal for the upward count. Blog followers should note whether ((A)) wave up of y gets overlapped in the next day or two. If it does, that would tend to reinforce the triangle count.

There is only marginal evidence (re: breaking of the up trend line from x) that this upward wave is over. But, while upward price movement could be over for a while, we must allow in the short term that one more higher high could be made. The length of the upward wave is currently satisfactory, but price may want to tag that 78.6% retracement level.

When, or if, the (d) wave downward commences, it is not a requirement that it stay above the x wave. It may break that wave low marginally to set a price trap, provided that it remain above (b). Again, if this is a low-volume triangle, then it is doing of it's job of "wasting time and moving price sideways."

Until further notice, the alternate for this count is a double or triple zigzag lower, however, the triangle must invalidate before considering those. Tomorrow is the last day of the month, and there could be some "end of the month window dressing", prior to the first of the month which, this month, sees both the Payroll Employment Report, and possible inflows from mutual funds, 401k's, dividend reinvestment plans, pension funds, and company bonuses.

So, for now, by the price action today, it should be clear to most that even if this downward wave develops as expected, it is still a corrective wave. Price action is overlapping and choppy, and it likely means that at some point, a new high will be made or attempted. Remember, we have shown only the likely direction of the minute ((c)) wave above - we have not attempted to show it's potential length. If it develops, it could be longer than shown.

So, again, stay loose and flexible as the end of eclipse month draws near, and the Labor Day Holiday approaches, as well.

And have a very good start to your evening.
TraderJoe