Nothing Broke

U.S. Debt Clock: $22.54 Trillion
ES Daily Candle: Lower High, Lower Low, Higher Close: Neutral Candle
Market Posture: Neutral-to-Negative and Probing Waves
Daily Swing Line: Lower (Lower High, Lower Low)
Daily Bias: Down (Settle Under 18-day SMA)

While nothing "broke" by the rules today, let's fix it anyway. The cash S&P 500 index chart on the 15-minute basis really is no longer "looking" like a proportional fourth wave - even though it measures OK at the close.

And because of the overnight futures waves which keep being both 1) dramatic, and 2) invisible in the cash markets, it seems like this is the better downward count.

ES - 2 Hr - Diagonal and First Wave Down

Even at the ((A)) wave up this morning, the futures were very near the 62% retracement level. And, there are now more up bars to ii than down bars to i.

So, if the count is correct, then there is an Ending Diagonal at the high. I did call the truncation at the (c) wave on the 1-minute chart. But other readers of the blog suggested the ending diagonal - which is longer in time - and then a completed first wave down to last night's overnight low. I have suggested before that counting the cash market is getting to almost be a fruitless exercise. This is another example.

The main reason for showing this chart is that if there is a true ending diagonal at the high, then the low of the (b) wave must be taken out in less time than the diagonal took to form. And looking at brokerage quotes for the ES, it already has been - although you would never know it from the above chart! I did confirm it using a second source of reliable quotes before writing this post, but this is a real caution for those using the "free" tools: they have the potential to fake one out (even though they didn't me, this time).

So let's see how this goes: neutral, flexible, patient and probing.

Have a good start to the evening,

TraderJoe