Small Point Losses

Market Outlook: Topped (more probable today) or still topping
Market Indexes: All major U.S. Equity Indexes were lower; DJUtil higher
SPX Candle: Lower High, Lower Low, Lower Close - Hanging man or Hammer
FED Posture: Quantitative Tightening (QT)

The market as measured by the S&P500 index closed yesterday at 2,585. Overnight the futures were lower, and the market gapped lower at the open today down to 2,578, then traded lower to 2,566 before rebounding, in the process creating a lower low day than yesterday. The rebound appeared to occur in three choppy waves: 2580-2572-2580, so far, to the 62% retracement level.

Because of the lower low day, the potential red wedge count alternate today lost "the right look", as below. It no longer looks like a wedge. Therefore it will be eliminated in the next update.

S&P500 Cash Index - Daily - Red Wedge Lost the "Right Look"

Therefore in the ES 4-Hr futures, we published this potential ending diagonal after the market opened. This diagonal would correspond to the blue wedge in the daily cash chart, above.

ES E-Mini S&P500 Index Futures - 4 Hr - Potential Ending Diagonal

The clear alternate for this count is the B wave of a flat or triangle, but until there is more price movement, it is difficult to assess. We have started a downward count in the live chat room, but it has not proven itself yet. If or when it does, I will let you know.  As always, for such a diagonal to prove itself, price must exceed the start of the diagonal at iv in less time than the diagonal took to build.

Meanwhile, you can feel the tug-of-war as the daily E-Mini S&P500 Index futures traded on both sides of the 18-day SMA, "the line in the sand", closing slightly above it at the settle.

Please note that while a triangle did not technically invalidate by the end of the day, it's "look" is strained a bit also at this time. That is because the upward b wave would look extraordinarily long in comparison to the other waves. But, a triangle could develop more proportionality and I will keep monitoring for it.

In the mean time the 4-hr EMA-34 now has a downward drift to it. So that is something to keep an eye on as The Fourth Wave Conundrum still requires the same commodities: patience and flexibility.

Have a good start to your evening.
TraderJoe