Dow 2nd of Two

For all of its overlaps, it is possible to count the Dow Jones Industrial Average futures (YM) as the second of two potential diagonals we showed in the prior post at this LINK.

DJIA (YM) Futures - 4 Hr - Potential Diagonal

What would now be needed now is confirmatory post-pattern behavior. As of this moment, we do not know the up wave is over, but it could be. Therefore, we must monitor. These would be the expected confirmation steps IF a potential diagonal formed and is complete.

1. Wave ((5)) must remain shorter than wave ((3)) in price, and preferably shorter in time.
2. Waves ((4)) and ((2)) would have to be exceeded lower in order.
3. The origin of the pattern would be exceeded lower in less time than the pattern took to form.

If any of the above do not happen then the pattern is not a true diagonal, and may be the diagonal's opposite alternate - a series of smaller degree 1, 2, i, ii higher. That is just the nature of the beast in looking for diagonal patterns. So, one must be on their toes from a wave-counting perspective.

The NQ futures finished up against their upper daily Bollinger Band - where the 'Smart Money' may be taking some off the table. The ES futures finished higher but may not be counted as a diagonal as the lengths of the waves are not correct. The ES did not contact it's upper Bollinger Band, and the daily slow stochastic is still embedded higher. Therefore, further upward movement is certainly possible. The Russell 2000 was higher but did not best it's prior high, yet. It may.

Have a good start to your evening.

TraderJoe