Risk-Off Day

And it fits the Intermediate (B) wave count like a Fibonacci glove with Minor Y = Minor W, as in the two-day cash chart below when you use the lowest part of the triangle instead of the ((e)) wave.

S&P500 Cash Index - Two Day - Y = W

You'll also note that - in terms of "fit" - the usual expectation for a triangle target was met today. You take the widest width of the triangle and add it to the break-out point. The arrow on the right is just copied over from the one on the left. Picture perfect.

It's been a tortured, twisted, halting, grinding, count upward. I turned negative in the comments a couple of days ago. A bit too early. Or was it? Unfortunately, nothing about the long-term contracting ending diagonal scenario invalidated. The only difference is that you see wave ((a)) of Y as the extended first wave of the impulse for ((c)) of 5 of (5).

Probably because there is a little more room in the Cycle V diagonal count (shown in previous posts), the only thing that might convince me it was favored over the Intermediate (B) count, above, is a further higher high - to make five waves up.

Either count suggests a move down to the lows of Intermediate (A).

Here is how that last wave up ended from the Iran Tensions low on January 7th and 8th, as best we can tell since there is now a critical overlap in this chart. Either location you use for wave i results in overlap today, ruling out a further fourth wave location within this sequence.

ES Futures - 2 Hr - Divergence at the Highs

Right now our task is to count the downward wave as best we can. This is done using the ES 5-min chart, as below.

ES Futures - 5 Min - Five Waves Down

As best we can tell - using the principles of degree labeling - the third wave is the extended wave in the sequence. It is longer than i, or v. At this point the retrace wave looks sub-standard in terms of both time and price, so we may see more to that in the Monday session.

Have a great start to your weekend.
TraderJoe