A Tale of Two Triangles - 2

Market Outlook: Expecting Higher Volatility
Market Indexes: Major U.S. Equity Indexes were higher; $DJTrans lower
SPX Candle: Higher High, Higher Low, Higher Close - Hanging Man Candle
FED Posture: Quantitative Tightening (QT)

In another quiet trading day, nothing has changed to invalidate either the potential contracting ending diagonal scenario or the impulse count with the fourth wave triangles. The market as measured by the S&P500 Index had closed yesterday at 2,682. The futures were higher overnight, and so the market opened with a four point gap to 2,686, and traded up as high as 2,687 where it met resistance, and turned abruptly lower in three waves to 2,683 although the opening gap was not closed by fractions of a point. Prices then drifted sideways and tested the lows before the final hour in which there was a small rally that allowed the market to close at 2,688.

To keep things simple, here is the same chart of the ES E-Mini S&P500 Futures, on a four-hour basis, that was shown yesterday.

ES E-Mini S&P500 Futures - Mar 2018 - 4 Hr Triangle Still in Tact

Again, based on this chart, the triangle is either the fourth wave of an impulse, or it is the b wave of the wave (v) in the diagonal count.  At this point, measurements are acceptable for both, but the impulse count has the best look to it. In this count, the (c) wave of the triangle would be the complex wave. The (d) wave might try to hit that upper trend line boundary.

This is a clear example of how exactly the same wave structure can result in alternates. And, there is nothing we can do about it because we are in The Fourth Wave Conundrum - which happens at every degree of trend. If, and only if, the triangle invalidates, we will look to a different wave structure, such as the market having topped at the wave ((iii)) location, or a larger wave b, downward. Again, the market may be hobbling over to that January 2nd date, pending the fresh inflows of cash.

So keep an eye on things, and keep your attitudes patient and flexible as we approach the New Year.

Have a very good start to your evening.
TraderJoe