What's Good for Goose - 2

Market Outlook: Now Getting Higher Volatility  
Market Indexes: Major U.S. Equity Indexes closed lower; $DJUtil higher
SPX Candle: Higher High, Lower Low, Lower Close -  Outside Candle
FED Posture: Quantitative Tightening (QT)

We said yesterday that if and only if the market held a 38% percent retracement on the S&P500 Hourly cash chart, and did so without overlap that we would look for a fourth wave. Neither of those conditions was satisfied at the outset today. Overlap occurred, and a fourth wave must be invalidated. Rules are rules. The cash hourly chart, showing the overlap is below. This happened on the way up, and we had a sneaking suspicion it would happen in the way down. That's why yesterday we said, "What's good for the goose is good for the gander."

S&P500 Cash Index - Hourly - Overlap at .i

Therefore, under the rules of The Eight Fold Path Methodology, and regular Elliott Wave analysis, then .i, .ii, .iii is the same as .a, .b., .c until it is not. So, while we still think we are in a flat wave minute (ii), the count on the c wave down changes slightly to the following.

S&P500 Cash Index - Daily - Minute (ii)

In short, we think the .a, .b., .c are the first three waves of a contracting ending diagonal for the c wave of minute (ii). In order for this count to hold, then wave -iii must remain shorter than wave -i of the diagonal.

It should be clear the light volume and whippy trading require exceptional patience, calm and flexibility. We will adjust as needed to meet the rules and guidelines.

Have a good start to your evening.
TraderJoe