Coiling

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

While nothing occurred today to in any way detract from the potential diagonal shown in the last few days, the market's upward momentum has been awful: down right terrible. Instead of opening with a proposed gap up, the market as measured by the S&P500 cash index opened with a small gap lower. It did not make a new low over Wednesday's FED day low, preserving the potential five-wave up scenario. In fact, price did not even fill the gap upward entirely. But neither did price make a new daily high. In the end, prices were narrowly mixed.

Here is a chart of the half-hour S&P500 Cash Index. We don't wish to confuse you - just show you the coiling price pattern.

S&P500 Cash Index - Half Hourly - Coil Forming

Price needs to get over the green "up" fractal (shown by ^ ) to establish an up trending wave, and needs to get below the down fractal (shown by v ) to establish a down trending wave. Clearly this formation can be a triangle, which can have an exit downward. But it can just as well be it's alternate pattern of a i, ii, up.

In my experience, it is best to let the breakout or break down determine the wave count; and not one's opinion.

Have a very good start to your evening and to your weekend.
TraderJoe