Triangle May Be Over

Market Outlook: Expecting Higher Volatility
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)

After the close of the cash market, the ES E-Mini S&P500 Index Futures went on to exceed their prior high.  The Dow Jones chart is below. It still looks (perhaps deceptively) very symmetrical. 

Still Very Symmetrical But Triangle 'Could' Have Ended Today

So, it is 'possible' the SP500 and ES futures will go on to form a 'barrier' type of triangle with tomorrow forming the (E) wave down.

BUT is about equally likely that 1) the triangle ended with a very stubby (E) wave today, or still a bit less likely that 2) a diagonal is forming. This is the essence of the fourth wave conundrum. I will show you the S&P500 Index cash hourly count that says the triangle ended below. It is a "legal" count.

The reason this count is legal is that wave (D) rises above wave B of the (A) wave, and above the B wave of the (C) wave. And wave (E) drops back down under wave ((3)). This is the key reason I proposed the triangle to begin with. If you look at how shallow wave two is, this triangle would equalize the depth of wave ((2)) and wave ((4)). Let me show you that on the chart, below.

S&P500 Cash Index - Hourly - Legal Triangle for Wave ((4))

The size of the black boxes shows that wave ((2)) and ((4)) would be much more "nearly equal" in net travel if the triangle is considered complete at this point in time. Again, it's not for certain. A slightly larger (E) wave is possible tomorrow. And, with the upward bias, a slightly larger barrier triangle or diagonal wave is not out of the question either. (* For this reason on the above chart, I am not showing the wave 'degrees' accurately represented. I will develop a chart with the degrees properly represented for tomorrow or the next day once we know whether a longer barrier triangle or a diagonal is formed).

In any event, the contracting triangle, the potential barrier triangle and the diagonal ALL suggest that higher highs are entirely possible and likely. This is in distinct contrast to certain Elliott Wave web-sites, and a major Elliott Wave Service who's wave counts are adamant that the up move is over by their count. I have written to one such wave service to tell them why their count is incorrect based on incorrect degree labeling.

As of this writing, I am still waiting on a satisfactory reply as the ES futures made a new all-time high tonight. 

Have a good start to your evening.
TraderJoe