What's Good For the Goose - 3

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

Yesterday, we noted how the c wave of the minute (ii) wave could be forming an ending contracting diagonal. If you followed the market today, you noted that today provided the lower low, quick reversal, and 62.% retrace which are the bare minimum requirements of waves ((3)) and ((4)) of such a diagonal. Below is the hourly chart, updated with each wave as called.

S&P500 Cash Index - Hourly - Minimum Possible waves ((3)) and ((4))

So, one more lower low could result in diagonal completion. However, the tendency is too rush these things, and a clear "throw-under" of a diagonal is not in evidence yet. Therefore, the following is the best alternate at this time.

S&P500 Cash Index - Hourly - Slightly longer waves ((3)) and ((4))

The second chart would also have better proportions with those waves preceding wave ((1)), as the (A)'s and (B)'s would be clearly visible. In no case for a contracting diagonal could wave ((3)) become longer than wave ((1)) : it would invalidate the contracting diagonal formation (but not an expanding diagonal formation).

Again, the first Leading Expanding Diagonal (A) wave and upward overlap at wave ((2)) are what necessitate this count in order to follow Elliott Wave Rules and Guidelines at the current time.

Have a good start to your evening.
TraderJoe