Lower Low Day

Market Outlook: Likely now In Minute ((iv)) of Minor 3
Market Indexes: DJIA cash made new all-time highs, S&P500 did not
SPX Candle: Lower High, Lower Low, Higher Close - Yin-Yang Candles
FED Posture: Quantitative Tightening (QT)

On a poor reaction to Facebook's earnings reports, the ES E-Mini S&P 500 Futures and the NQ futures were substantially lower in the after hours. The ES futures went down, and hit the 18-day SMA  bounced off it, and went back down to hit it again during the cash session, and bounced off it again.

The market as measured by the S&P500 Index closed yesterday at 2,579. Prices opened only ticks higher, then began to trade lower reaching 2566 (-13 points) in the first 45-minutes, making three-waves down from yesterday's all-time high. By the close, price was at 2,580, a one point change on the day. Here is a chart below from the high.

S&P500 Cash Index - 15-Minutes

With only three-waves down from the high, and the DJIA having made a new all-time-high, it is best for me to assume the move downward is corrective only in one manner or another, rather than assuming that the bear market started yesterday (i.e. per a major Elliott Wave service).

There are still ways this move could develop. With today's lower low, Ira Epstein's swing line has turned trend-less, but with a positive bias, over the 18-day SMA. We're counting as best as we can. And while we have a clear three waves down, we do not yet have either a clear three waves up or five waves up, as yet. In the chart above, the current location of wave (iii) makes it shorter than the current location of wave (i). A downward overlap would be needed for a diagonal. Lack of a such an overlap could result in an impulse count, upward.

The proposed tax plan and new Federal Reserve Chairman were advanced today. The market seemed to shrug on all that news. After hours Apple announced it had beat revenues, earnings and shipments with some upward movement in the stock and the futures.

Due to likely being in a fourth wave, and the possible presence of The Fourth Wave Conundrum, patience and flexibility are still needed until the situation further clears. We'll update the longer term when we get waves that break relevant fractals.

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