ES Daily Candle: Lower High, Higher Low, Higher Close: Inside Day
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Higher (Higher High, Higher Low)
Daily Bias: Up (Settle Above 18-day SMA)
Yesterday, we said to be on alert for a minuet fourth wave (iv) that could precede the last waves upward in the Y wave of Intermediate (B). In today's comments, the case for a triangle began to emerge and was counted out in real time. Here is a summary chart.
|SP500 Cash Index - 30 Minute - Potential Triangle|
With the MACD going flat, and volume scarce, price opened down and made a three-wave a wave that filled the prior gap up, shown, and retraced very close to 78.6% of the prior up wave. Then another "three-wave-looking" wave began upward and retraced very close to 78.6% of the prior down wave. These are ideal characteristics for a contracting triangle. Will they last? I'm not certain, but I would have to point out that another possibility is a barrier triangle if the b wave wants to extend further in time and price. After that, there should be a similar c wave down, etc.
There is also no requirement for a triangle here, although one is usually seen. Because wave (ii) is a sharp wave, then wave (iv) could also be a flat wave, if the b wave gets up to 90% of wave a. This is all provided that yesterday's invalidation level of 3,054 is not exceeded lower, first.
Have a good start to the weekend. Get some rest, and remain calm, patient and flexible.