Risk Increases - 2

Market Outlook: Still in Minor 3
Market Indexes: Major U.S. Equity Indexes Higher, except DJ Trans & RUT
SPX Candle: Higher High, Higher Low, Higher Close : Trend Candle
FED Posture: Quantitative Tightening (QT)

I'm still in the process of counting waves towards a potential top. A completed wave count is not in evidence yet. Here is way the S&P500 Index is being counted on the 30-minute chart. (Please ignore the degree of the waves shown. I just used these symbols to illustrate a point today.)

S&P500 Cash Index - Half Hourly - Current Count

This count was constructed very simply by drawing in the parallel channel, recognizing which wave as wave 2 would not cut off any portion of wave 3, and requiring that the up gaps be in the third waves. In doing this, you can see a portion of wave 3 is above the channel as expected, indicating the high momentum at that location. We also made sure we had no rule-breaking overlaps.

This morning, we had a brief downward wave that counted as a three-wave sequence, and it overlapped  the prior wave .iii before upward movement made new highs. For the rest of the choppy day I used Ira Epstein's swing-line technique to help clarify the up and down trend moves. As a result, the upward b wave looks like a three-wave sequence. It occurred on a divergence with the oscillator shown, and also stopped within a parallel outrigger placed on the high of wave iii.

Price left the swing-line neutral to lower at the end of the day. As a result, if price heads initially downward tomorrow and overlaps the 2535 level in cash, then we might expect a "running triangle" to occur preliminary to, or in conjunction, with Friday's payroll employment report.

The triangle would be about the only structure that could provide alternation with the flat wave 2, and it could get over to challenge the lower trend line boundary. Of course, such a triangle is not proven yet. But, if such a triangle should get validated, then triangles usually precede the last wave in a sequence. A triangle like this would invalidate below the low of the a wave in cash, and above the b wave. If price gets above the b wave before overlapping 2535, a diagonal would be the next option. If price gets below the a wave, before exceeding the b wave, then an expanding triangle would have to be considered, but, so far, so good.

Futures volume was again extraordinarily low, and volume is somewhat diverging from price here.

So, enjoy the rest of your evening the very best you can.
TraderJoe