Continuation Higher

Market Outlook: Expecting Higher Volatility
Market Indexes: Major U.S. Equity Indexes were higher
SPX Candle: Higher High, Higher Low, Higher Close - Trend Day
FED Posture: Quantitative Tightening (QT)

We had noted in Friday's post that while it was 'possible' to conclude an up move was over, there was no reason not to think that the first wave out of the triangle - on Friday - was anything more than sub-wave one of such a move out of a triangle. With today's stronger move, that case was proven, in what is likely the third sub-wave of such a move.

Given the length of today's move, it makes a minor change to the count, changing the locations of waves .3 and .4 for two reasons: 1) first, so that the length relationships within the waves is still acceptable, and 2) that the pattern of alternation is maintained.

The continued hourly chart of the S&P500 Index is below. The pattern of wave .2 is still a sharp, and wave .4 is still a Flat - just a complex flat.
 

S&P500 Index - Hourly - Still Counting Five Waves

There is currently divergence with the hourly Elliott Wave Oscillator (EWO), and with the RSI. The alternation in the count also gives wave .4 much more time in correction than wave .2, as it typical.

The Russell 2000 also made a marginal new high today. This invalidated the potential ending diagonal. We are trying to count five-waves up from the exit of a similar triangle - instead of a potential diagonal - in this index too. Right now, we appear to be in the third wave of that sequence, as well.

Have a good start to your evening.
TraderJoe