ES Daily Candle: Higher High, Higher Low, Higher Close: Trend Candle
Market Posture: Neutral and Probing Waves
Daily Swing Line: Up (Higher Low, Higher High)
Daily Bias: Up (Settle Over 18-day SMA)
Yesterday, we had counted three waves down as c = 1.272 x a, and shown on the chart below, along with the associated overlap. Nothing has changed except the hourly chart is shown instead of the half-hourly one to be able to fit today's waves on it.
|ES Futures - Hourly - Smaller Triangle (Green)|
Today, we counted out in excruciating detail a smaller triangle shown as green (a) - (e), above. By the time of the futures settlement, the triangle was proven out to be correct as the green (b) wave of the smaller triangle was exceeded upward, and the c wave of an overall zigzag appears to be building.
So, now, as earlier in the day, the question we ask is, "Are we getting a larger pre-FED triangle?" Such a triangle could indeed carry into the announcement and the press conference. While we don't know, we can suspect such. Such a plausible triangle is shown starting with the larger brown (a), (b) in the chart above. Of course, such a triangle would have to form perfectly in every detail. Today's waves are part of the reason I was very conservative on yesterday's call of just a-b-c down. Could it be more? Yes, it could, but for that to occur then 2,980 must be exceeded lower, first. That's not quite the same level of where the c wave following the triangle invalidates. That would invalidate below the (e) wave of the green triangle.
It's very nice to get some clear invalidation points for a change, as it aids greatly in wave counting.
Again, the waves are very compressed. The charts are very messy. A pre-FED triangle in this location would be suggestive of another high to follow. First, let's see if such a triangle forms properly. Keep an eye on overnight developments. The FOMC announcement is tomorrow.
Have a very good start to your evening.