Triangle Continues - 3

U.S. Debt Clock: $22.84 Trillion; prev $22.83
ES Daily Candle: Higher High, Higher Low, Higher Close: Spinning Top
Market Posture: Neutral and Probing
Daily Swing Line: Up (Higher High, Higher Low)
Daily Bias: Up (Settle Above 18-day SMA)

As if right on cue, each of the major stock index futures (the ES, YM, and NQ) made higher highs this morning within the 12 - 18 hours from last night's 5 PM post. The S&P500 cash index did also. The only problem is that the Dow cash did not - although, again, it's futures did. Yesterday, we did mention the possibility of failures at this level. Did the Dow cash fail? Let's see what tomorrow looks like to help answer that question.

So, there are sufficient waves to say that an upward diagonal is properly formed in the majority of the futures contracts. This may be sufficient for the minute ((a)) wave, upward, as below.

ES Futures - 2 Hr - Enough Waves for a Diagonal

After 10 AM there was the two-hour bearish engulfing candle that can be seen at the point of the current wave (v). So, a diagonal could very well be complete here. However, if you drop the lower trend line to include all of the current candles, it is possible that today only resulted in wave (iii) of the diagonal. That is shown as ALT: (iii), above. This is why it is so crucial to keep a close eye on the overnight futures at present. Today's down move did not take out that 2,954.75 level in the ES futures which we said yesterday was a well-tested shelf. So, like it or not, there is the clear possibility of one or two more marginal highs in this pattern as the Elliott Wave Oscillator continues to diverge from price.

From a daily perspective today's spinning top candle would require closing confirmation lower - as with all one day candle patterns.

Minute ((a)) may have ended. Whenever, it is confirmed to end, then it would fit into the potential triangle continuation count in this fashion on the daily chart, below.

ES Futures - Daily Close Only - Continuation of Intermediate (B)?

We can not stress it enough. We are in an Intermediate (B) wave. It is not a daily diagonal - as some suggest - because we have shown the lengths of a daily diagonal are incorrect. But all (B) waves are highly intractable affairs. Their very purpose is to trap money in at the highs. That's why they are termed "phonies" in The Elliott Wave Principle by Frost & Prechter. And, the expanded flat "b" style wave can always travel to 1.27 or 1.38 times their respective three-wave "a" wave. And that's what we had at the December, 2018 low - three waves down of Intermediate degree. I'm going to leave you to do those Fibonacci measurements as an exercise - especially if you are relatively new to Elliott Wave theory.

So, we'll take it step-by-step.  Clearly, for the continuation count there should be a new all-time-high. Perhaps the FED meeting near the end of the month (Oct 29 - 30) will provide some additional clues.

Have a good start to the evening.

TraderJoe