Market Mish-Mash

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

As we aptly titled our Thursday post "Interim Top Possible Not Proven", our cautious approach to this whippy market is in clear distinction to the outright bears who keep calling for immediate declines. First, note that the ES E-mini S&P500 futures had a clear outside reversal day up, as distinct from the S&P500 cash index. Further, the daily slow stochastic on the ES futures remains clearly embedded - a potential bit of evidence for higher prices yet.

Next, here is the S&P500 cash index 15-minute chart from the recent high - whether it is an interim top or not.

S&P500 Cash Index - 15 Minutes - Not Impulsive to the Down Side Yet

Looking at the decline so far there is is not much that looks impulsive about it. After the first gap down, it's like the market "put on the brakes" to whip around more and chew up capital. So, either another diagonal is forming in the downward direction. Or perhaps, there is still the left-over of a triangle fourth sub-wave of minuet i to play out yet before the recognizable fifth wave high. Or, perhaps, this is a first wave or an 'a' wave down, three waves up of a a:3 wave, three waves down of a b:3 wave, and the market has started on or completed five waves up of a c:5 wave for a flat second wave or 'b' wave.

It is clear with the market in this position, you are clear to "pick your poison". You have roughly a 1 in 4 chance of getting it correct based on wave counting skills alone, or a 50% chance based on direction (up or down) alone.

Along with The Fourth Wave Conundrum that happens at every degree of trend, this is another reason why I remain neutral and am attempting to count waves to a countable top.

Have a very good start to your evening.
TraderJoe