Exceptionally Light Volume

Market Outlook: No Confirmation yet of top of Minor 3
Market Indexes: Most Major U.S. Equity Indexes were higher except $Tran, and $Util
SPX Candle: Higher High, Higher Low, Higher Close; potential spinning top candle
FED Posture: Quantitative Tightening (QT)

The Dow Jones Industrial Average, S&P500, ES and NQ futures made new higher all-time highs today. However, they did so on the lightest non-holiday futures volume of the year (at less than 800k contracts!). Stock volume was quite low, too, at only 2.9 bil shares. Furthermore, advances and declines were mixed, as were up & down volume. The Dow Transports did have a follow-through day to the down side. That chart is below.

Dow Jones Transportation Average - Follow Through Down Day

Technically, the lower low and lower close "activate" the previous day's bearish engulfing candle. There has been both a clear break of the up trend line, a divergence, and a gap fill lower.

The NQ futures exceeded the maximum limit (6,109.50) for a smaller diagonal, and likely have made this triangle. And the trust from the triangle should be in five waves. With today's higher high, five waves can indeed be counted.

NQ Futures - Daily -Triangle Rather than Diagonal

Because the NQ did not make a diagonal yet, we think it actually strengthens the case that we are still only in Minor 3 wave, and not the end of the market cycle as at least one major Elliott wave service wants us to believe. If the NQ goes on to make a larger diagonal (connect the dots of a new upper trend line in your mind), then that may become a different story. It hasn't yet.

The ES Futures on a four-hour basis made a new all-time high today, but continue trading in this wedge shape - which can still be a diagonal.

ES Futures - 4 Hr Chart - Wedge Shape

Due to the significant nature of the higher closes, we don't think the ES counts well as a triangle at all. It is either a diagonal or some sort of B wave. With prices solidly in the "chop zone" right now, it is very difficult to sort out diagonals from B waves. So, we keep our mind open for either. But, we think volume may be a very significant clue. The Russell 2000 futures and Russell 2000 cash index had an outside day, and may be on the verge of losing their embedded slow stochastic reading. Time will tell.

Have a good start to your evening.
TraderJoe