Pop out of Triangle

Market Outlook: Still in Minor 3, Risk Increasing
Market Indexes: Major U.S. equity indexes higher
SPX Candle: Higher High, Higher Low, Higher Close; Trend Candle
FED Posture: Quantitative Tightening (QT)

The market as measured by the S&P500 did make higher highs today, most likely out of the triangle formation we saw yesterday. Here the continuation of yesterday's 15-minute chart which shows that pattern best.

S&P500 Index 15-Minutes

Apparently the target of the wave is the 1.62x Fibonacci extension level shown at the top of the chart at the 2521 level. Again, the very purpose of the triangle was to equalize the net price distance taken by wave iv versus wave ii since 27 September. It did that. Further, since wave iii is longer than wave i, then wave v can be any reasonable length.

I did label the 25 Sep wave high as 'a'. But, in checking now with the daily chart, this type of wave count makes the most sense.

S&P500 Index - Daily Chart

So, even though we got the up wave that a triangle would predict (on the 15-minute chart), an expanding triangle at the high - the previous (d) wave count - would now look disproportional, and would result in wave iv of (v) having a much larger point travel than wave ii of (v). Therefore, I have simplified the count to a simple flat for wave iv of (v), and we are now impulsing upward. That may change that 25 Sep 'a' wave to a '1' wave. If it does, that's OK. A top is not evident yet. Maybe close, but not evident.

The chart that currently looks the most straight-forward is this chart of the NQ futures. Granted that looks can be deceiving, the pattern is what it is.

NQ Futures Daily - Potential Diagonal

In case you are wondering, we tested all sorts of intra-day diagonal patterns on the S&P500 today. We were flexible and open-minded, but, in the end, none of the required measurements held water. The NQ futures would have to do the same. A wave (v) would have to remain shorter than a wave (iii), and it should cross the high, but is not required.

It is interesting to note that the EWO is now back near the zero line in fourth wave territory, and another high would likely provide the final likely divergence.

Have a good start to your weekend.
TraderJoe