Market Indexes: Most U.S. Equity Indexes weakly higher
Well, in true fourth wave style, a potential gap down lower did not occur today. The market closed yesterday at 2439, gapped up at the open to 2445, and continued rising to 2453 until chair Yellen's comments at the Jackson Hole Summit were released. This rise closed the gap down from Aug 22, but in the process left another open gap on the chart. But, the price rise did not exceed that day's high.
At that time, we published this potential C wave failure count, and the C wave high was not exceeded for the rest of the day. That would make a zigzag for wave ((2)) and an expanded flat for wave (2).
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| SP500 30-Minute Chart : C Wave Failure? |
Then prices made five-waves-down to 2442, not quite closing the opening gap. Then, there was a near exact 78.6% retrace to 2451 until Mario Draghi's comments were released. Those upward waves moved in a narrow channel, were very choppy and overlapping, and were at a lower angle than the prior upward waves. We counted the upward waves as a double zigzag w-x-y.
Prices then headed slightly lower after Draghi's comments were release to end up at 2443, still not closing the opening gap.
Only the fact that a higher high was not made over wave ((iii)) on Aug 22 keeps a potential impulse count lower alive. The triangle count is still alive too should the above count not prove to be an impulse lower. As a trader on CNBC said today, "2440 is kind of a fulcrum for the S&P500 right now." Makes sense.
The Daily Chart of the S&P500 Index is below. As we said before, one gap was closed (black circle) and one gap was opened.
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| S&P500 Index Daily - Possible Inverted Hammer Requiring Confirmation |
On the daily chart, the daily candle has formed an inverted hammer candle under the EMA-13 and EMA-34. And this candle potentially is supportive of the impulse count, lower. Still, as with most candle patterns, downward confirming closes are needed.
For now, have a good start to your weekend.
TraderJoe
Thanks Joe. In traditional TA terms, we now have a H&S formation, with the left shoulder being the 6/19 high, and today completing the right shoulder. As you stated, there are still several downward EW counts possible. The setup is there for the market to start accelerating down on Monday.
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