No Impulse Yet

With the real strong proviso that things could change next week, the chart below would indicate that at the present time prices can not be claimed to be impulsing higher.

ES - 1 Hr - In Channel

For the moment, prices have not broken the potential channel to the upside. I saw no issue with them potentially doing that. Why has the market said, so far, "prices have not exceeded the upper channel"? Further the measurement from a to ((1)), is just about equality, with ((1)) a bit longer. On Friday, prices retraced to 0.382 in cash, or a little more in cash depending on which peak is picked for the top.

IF a top is being made, the count outlined is that of a potential ending diagonal. There was no clear reason why prices didn't further impulse on Friday. They tried to pop, but backed off markedly and broke a shorter term trend channel. Weak action on the close.

Still, at this point, there was no overlap between ((2)) and the prior .a wave on 8 Aug. So an impulse is not required. It could happen, but it doesn't have to. The market is really getting very, very cagey. That means that just a higher wave to end a 5 th wave (seen in red) can not be ruled out as an almost equal alternate.

To some extent, we must see what occurs early next week. That does not mean the situation is murky. It simply means the market is outlining risk parameters as follows: trading over ((1)) can not rule out further highs. But trading under ((2)), and, more so, under the prior .b wave, and therefore outside of the lower channel line would tend to indicate lower prices to follow. That's about a 45 point price range at this time.

I would add the note that since ((1)) is slightly longer than a, then a 1-2-i-ii from the low would seem to violate degree labeling.

And, as a result, patience, calm and flexibility are still needed until a more clear interpretation is present.

Have a good start to the weekend.

TraderJoe