Weekend Bonus Chart

Looking at the chart below, I can't help but wonder if the Russell 2000 Futures aren't making a year-end triangle as the other markets are making a potential diagonal wave. The purpose of such a triangle is generally to better equalize the length of wave iv, with the length of wave ii, and to provide alternation to it. Wave ii is a short sharp, so wave iv could be a longer flat or triangle for alternation. As of this writing, there is no downward overlap yet, and a triangle could be seen as (a),(b),(c),(d),(e) as labeled.

Russell 2000 Futures - Daily

You can see from the chart, wave ii was roughly 25 points. And if a wave iv ended at the location of (a), then it would have been almost 60 points. So, the purpose of a triangle would be to try to narrow the overall point gap between the two.

If a triangle is forming, then although the first wave down to (a) looks like a mess, it can be counted as a simple a-b-c with a as a leading expanding diagonal, and c as a very clean impulse. Then, the (b) wave up of the triangle would be the complex leg, formed of two zigzags w-x-y. Then, the remaining legs should be simple zigzags.

It does look as though in order to maintain its contracting shape the (d) wave is done or near-done. But, then, for a "running triangle" - with a higher (b) wave - to form properly, the (e) wave must come down to cross back over wave iii before the final thrust out of the triangle.

Running triangles must contract, and they must have their (e) waves cross back over the prior motive wave, iii, in this case, or A, in the case of a zigzag. The triangle in this form would invalidate with any movement below the (c) wave, with a more complex flat as an alternate.

One of the reasons the chart is interesting is that a triangle usually comes before the last wave in the series, and a target of v = i, or less could be projected to make a slight new high.

Hope this helps, and have a great weekend.
TraderJoe