Riding Lower Trend Line

Market Outlook: Topped or Fourth Wave Triangle in Minor 3
Market Indexes: Most major U.S. Equity Indexes were higher
SPX Candle: Higher High, Higher Low, Higher Close : Doji Candle
FED Posture: Quantitative Tightening (QT)

The stock market as measured by the S&P500 Index opened with a small gap up today - as might have been expected from hitting the lower channel trend line we showed yesterday. Prices then headed lower until about noon but did not fill the opening gap. Because of the gap up nature of the opening bar, it is very, very difficult to tell if it is a "three" or a "five". See chart below.

SP500 Cash - 30-Minutes - Count Matures

For this reason, if the up wave sequence is a "five", then it is possible to count a top at this degree. And if the up wave is a "three", then it is possible this wave is ending with either a triangle or diagonal. At this time, the above chart shows the top and the triangle option. But, once, again, this is a clear representation of the phenomenon I have called The Fourth Wave Conundrum.

It is what makes calling tops in Elliott Wave work particularly treacherous, and that is the fact that many, many sequences can result from only an a-b-c down after a wave 3.

Because of the lack of a "key reversal" day down, at this point, we must allow that the up move is still in progress while being very, very watchful for such a reversal. Certainly, the 2,540 level is now a key marker for the uptrend. If it is exceeded lower, it would mark a reversal of a certain degree which we will provide an update on if / when it happens.

Please note the Elliott Wave Oscillator did climb back above the zero line, indicating either a continuing fourth wave or a divergence for a fifth wave high. Time will tell.

Again, the NQ futures 'can' be counted as having completed the daily diagonal, but only a clear reversal there, too, will provide confirmation.

Until then, have a very good start to your evening.
TraderJoe