No opinions - mostly

There are some objective observations one can make without eliciting a whole range of out-of-control conjectural opinions. For example, some people venture a new five-year Elliott wave count, without offering even the slightest resolution of the current week. I will try to avoid that by starting with some basic facts.

First let's look at the daily chart of the ES E-mini S&P500 Index Futures, below. In this chart, for graphic clarity wave a means the same thing as minute-a, or ((a)), or circle-a. But the chart gets muddy with all that stuff on it, so I'm keeping it clean.

ES E-Mini S&P500 Index Futures - Daily - With Indicators

 

Looking at the right-hand side of the chart, there are three objective observations one can make and we can all agree on.

1. Price has 'currently' retraced to the 62% retracement level, and put in a red Doji candle today.
2. Price has run into the daily upper Bollinger Band (18-day variety), gray dashed lines.
3. Price has run into the 100-day simple moving average, green dashed line.

It is clear this is three different levels of overhead resistance. How much more does one need?

A fourth observation is that in mid-November, the NQ futures made a lower low for a true "flat" wave, whereas - as we commented before - the S&P500 could not even made the 90% level downward on the a wave to make a true flat wave. Therefore, it is not much conjecture to say that if there is a "b" wave anywhere on the chart, then the December high is it; otherwise the indexes get out of sync.

A Fibonacci fifth observation is that the daily slow stochastic is only "Over-bought" at this time. It is not re-embedded. At least not according to my chart service, and that is because the red line dropped below the 80 level on both 1/29 and 1/30.

These are the clear facts. 

Now for some questions.

1. Aren't second waves supposed to retrace 62% ?

2. Aren't corrective waves supposed to be a little muddy as to their exact count?

3. What happens if another wedge forms here (suggested by the blue lines on the right)?

If, as the chart suggests that wedge would be a 'c' wave of 2, then it should wind up overlapping the 2,676 level - at least - so it overlaps the first wave of a potential diagonal.

Whether that happens or not remains to be seen. I can tell you - for sure - you just got more information here than I just got in my recent monthly edition of a newsletter from a major Elliott Wave organization. They didn't even take a stab at a count. But we're to believe them ???

Have a good start to your weekend.

TraderJoe