Start of Minuet (c) Wave

U.S. Debt Clock: $22.91 Trillion; prev $22.91
ES Daily Candle: Higher High, Higher Low, Lower Close: Yin-Yang Candle
Market Posture: Neutral and Probing
Daily Swing Line: Neutral (Higher High, Lower Low)
Daily Bias: Up (Settle Above 18-day SMA)

There were about 5 - 7 points of positive movement in the ES futures overnight and the futures got up to 3014. Likely that was related to relatively positive news about the Canadian elections. That was given up and then some by 04:00 ET, still in the overnight session. The cash market opened up, and the futures tried  to bust the 3014 level four or five times. They couldn't. That level is where the minuet (b) wave is 150% times the minuet (a) wave in the chart below.

ES Futures - Hourly : (b) = 150% x (a)

Prices battled within the new hourly up trend channel for the (b) wave for several hours. There was all sorts of difficult news including an earnings miss by MacDonald's, problems with Boeing, and problems with Brexit. At 14:40 ET we noted that price was leaving the hourly channel to the down side on a divergence with the hourly MACD, and it fell quite hard. It took out the prior up wave in less time than the wave took to form. At this point, it only looks like a first wave down.

If the minuet (c) wave has started in earnest lower, there could easily be backing-and-filling for a second wave. A first price target from a wave counting perspective would be 1.62 x (a) subtracted from the (b) wave high. The (b) wave count is very difficult - as they typically are - and appears to be either a double or triple zigzag. (Notice that if you tried to count the wave as an impulse, then no part of a supposed third wave broke the upper channel boundary). And the last wave may have truncated a bit.

With the upward (b) wave measuring inside of 150% x (a) wave, then it is not as prone to failure, as if the (b) wave was greater than 162% x (a). So, we should expect price to move below the minuet (a) wave at some point, and could get to the 18-day SMA, or lower. (Nothing here is intended as or is to be taken as trading or investment advice).

Have a very good start to the evening.

TraderJoe