A Matter of Degree - 3

Market Outlook: New Highs Occurring after Hourly Triangle in SPX
Market Indexes: Major U.S. Equity Indexes Mixed after SPX, DJIA, DJTrans new all time highs
SPX Candle: Higher High, Higher Low, Lower Close - Doji Candle
FED Posture: Quantitative Tightening (QT)


Sorry for the late posting. Technical difficulties. The market as measured by the S&P500 had closed yesterday at 2,627. There was a small gap and a new all time high at 2,635 - meeting the objective for the thrust from the triangle. Then, some of the markets reversed, with the NQ hit the hardest, and down -130 points at one point in the day. Today's new all time high capped the third wave ((3)) on the chart below, and the sharp down move has likely put the wave count into the ((4))th wave. Wave ((3)) came very close to a 1.618 extension, but, suspiciously, did not quite make it.

S&P500 Cash Index - 15 Minutes - New ATH

Again, this is judging by the location of the gaps and the heights of the Elliott Wave Oscillator. There does not appear to be a good diverging peak for a fifth wave yet. Because wave ((2)) is a drawn out flat, then wave ((4)) should be a sharp or triangle for the best alternation. Wave ((4)) by rule may not overlap wave ((1)) for an impulse count. So far, so good. If wave ((4)) invalidates then we will look at alternate structures, but we do not need to do that now, so let's keep it simple.

From a slightly longer term perspective, the ES E-Mini S&P500 Index futures had their second daily close above the upper Daily Bollinger Band, so the odds of another day outside the band - by rule of thumb - drop to about 3%. That is certainly not impossible, but the probabilities begin to drop with each additional day outside the band. The daily slow stochastic is still embedded, however.

Have a very good evening, and keep one eye peeled on those pesky legislators in the the U.S.
TraderJoe