Risk Increases - 4

Market Outlook: In a fourth wave after a third wave
Market Indexes: Mixed
SPX Candle: Lower High, Higher Low, Lower Close : Inside Candle
FED Posture: Quantitative Tightening (QT)

Prices as measured by the S&P500 index gapped down on the weak employment report, and traded down to 2,544. In doing so, prices re-entered the main channel we had showed for the last several days, and likely made an a wave down at this degree to start a fourth wave. In doing so, the Elliott Wave Oscillator on this time frame, and with 126 candles on the chart appears to be headed for fourth wave territory.

Beginning about 12:30 pm, prices started trading back and forth in what looks like a bear flag on the short term chart, and is likely a b wave.

S&P500 Cash - Half-Hourly - EWO Dropping

After reviewing some internals, I slightly modified the fifth wave extension wave yesterday, but not in a significant way. If this 4th wave wants to make a triangle, that would be acceptable. So would a simple sharp that alternates with the flat wave 2. So far, the mid-point gap is proving it's worth as a measuring tool.

On the chart of the NQ futures, the count is clearly reaching the point where the market must decide if the completion of a contracting ending diagonal is dead ahead, or not.

NQ Futures - Daily - Potential Diagonal

For this count to hold as a diagonal, prices should not trade above 6,109.50 before trading below the low of (iv). If prices exceed that level slightly, and then reverse, then there is some potential the structure is a barrier triangle instead of a diagonal, but, for now, this structure has the right look, including the slight throw-over of the upper trend line.

Have a very good start to your evening.
TraderJoe