Triangle Validated and Confirmed

Market Outlook: New Highs Occurred after Triangle
Market Indexes: Most Major U.S. Equity Indexes were higher
SPX Candle: Higher High, Higher Low, Higher Close - Trend Candle
FED Posture: Quantitative Tightening (QT)

You probably know already that the S&P500 Cash Index did, indeed, make new all-time highs today. This occurred on the completion of the proposed and validated triangle, higher.

As measured by the S&P500 Index, the market closed yesterday at 2,582 and overnight the futures were much higher. So the market gapped higher at the open to 2,589. When price surpassed the (d) wave of yesterday's triangle, it was clear the triangle had both validated and completed. The updated hourly chart is below.

S&P500 Cash Index - Hourly - Validated and Completed Triangle

Prices then climbed to 2,601 before falling back slightly to close at 2,599 and change. The above triangle was validated when the (e) wave crossed back over the origin of the running triangle, and the triangle was confirmed as a triangle, and completed when the new all-time high was made this morning. It was entirely appropriate to consider the potential expanding diagonal as corrective.

For form and balance, the EMA-34 has been added to the above chart, and it can be seen that every triangle leg is on an opposite side of the EMA-34.

For comparison, the ES E-Mini S&P500 Futures chart is below. You can see how it has a much better formed (e) wave - because of the news story in the overnight regarding the loss of a coalition in the German government - and yet how it had even a more likely w-x-y-x-z, downward for the (c) wave as that shape does not look much like a diagonal at all.

ES E-Mini S&P500 Index Futures - 4 Hr Chart - Deeper (e) Wave

The only people that you will hear deny this triangle are those that didn't patiently count it's every twist and turn. The thrust out of the triangle came as no surprise, but does not appear to be completed yet.

And, the triangle poses a special little problem to the outright bears - such as certain Elliott Wave services - because it is another running triangle. We have not seen a good "interior" triangle yet (one who's B wave does not exceed the origin of the triangle) but perhaps we will if  the market properly forms the wave ((4)) shown.

Keep in mind that with these higher so-called breakout highs, the ES volume again shrank to only 1.1 MM contracts, and breadth was only 2:1, not the 3-to-6 : 1 which is more characteristic of massive impulses.

One interesting thing to note: as it stands right now, wave ((3)) of the thrust out of the triangle is only 1.27 x wave ((1)). That could mean that wave ((5)) will become the extended wave in the sequence. Doesn't always happen, but it could.

Well, that's enough for this evening. Have a very good start to yours and best wishes for safe holiday travel if you are heading out on the road, on the rails, the water, or in the air!

TraderJoe