Tag of 0 - 2 Trend Line

U.S. Debt Clock: $23.15 Trillion; prev $23.15
ES Daily Candle: Higher High, Higher Low, Lower Close: Yin-Yang Candle
Market Posture: Neutral
Daily Swing Line: Higher
Daily Bias: Up (Settle Above 18-day SMA)
Resistance: Upper Daily Bollinger Band

With 105 candles now on the ES 4-hr chart, and after having slightly exceeded the 1.618 Fibonacci extension level, price came down to tag the 0 - 2 trend line with lower highs and lower lows since wave ((3)).

ES Futures - 4 Hr - Tag of 0 - 2 Trend Line

The presumption (until proven differently) is that this is a fourth wave, and a 38% retracement of wave ((3)) might be expected. The timing may work out if 30 & 31 December are typical month and quarter-end window dressing days, with their concomitant sloppiness. Then, the first trading day of new year might see the typical inflows from pension plans, company bonuses, 401K's, and dividend reinvestment plans, etc. as part of wave ((5)).

There is a high degree of uncertainty in this wave, as wave ((4)) could take the shape of a triangle, or wave ((5)) could take the shape of an ending diagonal - usually not both at once as that would be poor alternation.

The alternate for the ((4))th wave - if price heads more radically lower is that an ending diagonal wave is being made for minute ((c)) of Minor Y of Intermediate (B).

The Elliott Wave Oscillator on this time frame is currently declining after diverging from price. Yet, the daily slow stochastic is still embedded over the 80 level, and the bias is up with the daily close over the the 18-day SMA. The two time frames are fighting each other.

So, we'll take it wave-by-wave, and also look at the technicals again over the weekend. Have a good remainder of the holiday.

TraderJoe