A Bit of Volume Returns

Market Outlook: No Confirmation yet of top of Minor 3
Market Indexes: Most Major U.S. Equity Indexes were mixed
SPX Candle: Lower Low, Lower High, Higher Close; spinning top candle
FED Posture: Quantitative Tightening (QT)

The market as measured by the S&P500 closed last night at 2561. It gapped lower in the over-night and traded down to 2548 invalidating both of the potential diagonal scenarios that were seen, and activating the B wave alternate we posted on October 17, two days ago. The market spent the rest of the day chopping higher, and closed the opening gap just before the closing bell.

Overall, nothing has changed. We still do not have confirmation of a Minor 3 top, and are just counting and adjusting wave counts - following the rules. The chart below of the ES futures shows where we are right now.

ES E-Mini S&P Futures - Weekly Chart

It should be very clear - whether you count 1-w-x-y-2 off the bottom or 1, 2, ((i)), ((ii)) off the bottom - that price is well beyond the 1.618 Fibonacci extension. Therefore, we should look for a fourth minor wave to this bull market. Remember, there is at least one major Elliott Wave service calling for this to be "the top". The problem for me with that call is that their third wave doesn't channel well at all. At least the longest part of wave 3 in the above chart does form a channel.

By the count shown for Minor 3 on our chart, it would suggest that the maximum for the rally is at ES 2582.50, because there a wave ((v)) of Minor 3 would be become longer than wave ((iii)) of 3. But, in this count, wave ((iii)) of 3 is shorter than wave ((i)) of 3, therefore wave ((v)) must be shorter than wave ((iii)). So, we are showing that Fibonacci extension in red.

Again, we are using the election night low as the low of wave 2 so that a line from 0 to 2 does not cut off any part of a wave 3. So far, so good.

Today, on the rise, in the live chat room, it was possible to count "five waves up" after the low at 10 AM ET. These five waves up may not be done yet. And there is no evidence the rise is over, but we just need to keep in mind there is a small probability there is a truncation. That's just the nature of the beast.

I have included the volume on this weekly ES chart, so you can see how oddly the volume is falling off for a non-holiday period.

Well, that's enough for now. Patience and flexibility are still needed. So have a good start to your evening!

TraderJoe