How to Tell - Part 3

Market Outlook: Minor 3 Top more likely, Waiting on Final Confirmation
Market Indexes: Most major U.S. Equity Markets were higher; $CompQ was lower
SPX Candle: Lower High, Higher Low, Higher Close - Inside Candle
FED Posture: Quantitative Tightening (QT)

They know you're watching. Stocks, as measured by the S&P500 Index closed yesterday at 2,557. They gapped up at the open, ending yesterday's potential impulse pattern, and traded up to 2,567 before starting a slow sideways movement and catatonic drip lower. At 2,567, they ran into the trend line from the top, shown in the chart below. They rode that trend line for the rest of the day for some reason.

S&P500 Cash Index - 15 Minute Chart

Today's higher high occurred on a divergence with the oscillator shown, and then the oscillator itself headed lower, seeming to confirm a lower high. By the end of the day, we potentially had a fourth wave (iv) that is longer in time than it's second wave (ii), and it is longer in length as well. I said a diagonal might be possible if the potential impulse count lower did not survive today's gapping direction. And such a count - of a diagonal - could still be possible. By the end of the day, there was a tiny diagonal downward and the start of a retrace wave upward.

But, like all diagonals, we don't know if that new, smaller diagonal is a leading diagonal for wave .i down to a larger a wave of the current potential diagonal, or if it is an ending diagonal which which is just the end of the b wave, overall. The market is really playing it's cards close to the vest.

Since tomorrow is advance GDP day, it will be interesting to see whether price conforms to the trend lines shown or makes new ones.

What new trend lines could the market make? Well, the last downward gap is not closed yet. We thought that might be the target today, but the market was too spongy. If price gets up to that level, then I completely reserve the right to call the three legs down as only a,b,c instead of (i), (ii), (iii).

Yes, there are some things not to like about a diagonal count. But, so far today, momentum was wheezing. It could all be a set-up for the GDP report, and so, in either case, I remain completely and entirely neutral and in a mode of trying to obtain confirmation in either direction. As far as charting I can only chart what I see. I hope it helps.

In that regard here is the NQ futures chart as of the close.

NQ Futures - Daily

After contacting the daily EMA-34 again, the futures have bounced off of that and the horizontal support shown. Just keep in mind that price may be at the apex of a triangle - which is often the timing for a turn. That remains to be seen yet.

Bottom Line: To start a count lower five-waves down are needed, and they are not in evidence yet.

Have a good start to your evening.
TraderJoe