Some Clarity Today

Market Outlook: End of Minor 5 (60%), Still in Minor 3 (40%)
Market Indexes: Mixed to higher

I am posting this one just a bit early today to get some things done and ahead of the FED meeting tomorrow. This is being posted slightly before the close.

The market as measured by the S&P500 Index opened with a small gap up that was quickly and completely filled. About mid-morning, the potential failure wave high from yesterday's five-minute chart was exceeded marginally, then prices reversed a bit, and reversed again - all for small point loss or gains.

Based on that I decided to back off to the 15-minute chart to review the wave internals. The chart of that review is below.

S&P500 Cash - 15-Minute Chart

So, the above count is predicated on the most recent bar or bars making a new high above the brown (iii) wave. If that happens in any form then we may have the a wave of a wave (iii) of yet another diagonal. And, yes, it would likely be yet another Leading Diagonal within a larger diagonal.

Over on the left-hand-side of the chart, you can see the original diagonal I had counted out on the 5-minute chart. It turned out to be an a wave, itself, the a wave of the first wave, (i), of this diagonal. Remember, there was a retrace wave within that 5-minute b wave - even though that has disappeared on this larger time scale.

The fifth wave of a leading diagonal for this a wave may not fail. It must make a higher high than the wave (iii). If it does, we're good and it will give us a measuring tool, because wave (iii), up, may not exceed the length of of wave (i), up, of the larger potential diagonal. It could do this today or early tomorrow, but it must happen - or something else is occurring - like a regular triangle. But, so far, all the waves are counting properly, and it looks like this potential diagonal would then last into the FED meeting.

Remember, within (iii), there would first need to be a b wave down, then a c wave up, for (iii) that must cross the high. That would likely happen between now and tomorrow.

For students of Elliott Wave, it is very interesting to note how many "flat" b waves there are within the zigzags of these diagonals. They are waves which can literally cause a wave counter to scratch their head, and say, "whuh?" over & over & over. Further, if this happens properly, it is amazing to see how the smaller diagonals would be smaller fractals of the larger diagonal. To an Elliott analyst, that is a market almost screaming for reversal. But, it all has to play out properly first ...

For now though. Have a good start to your evening.
TraderJoe