Saturday, February 29, 2020

It Took Some Noodlin'

Sometimes a wave count comes easily. Sometimes a count really takes some conjuring!

ES Futures - Hourly - Extended Wave x1

Even while I was counting during the heat of the battle I knew we were likely dealing with an extended first wave count x1. But, it was very, very hard to find.

The trick in this case was to think "b" wave. Yes, that failed flat for wave 2 had a very, very long minute ((b)) wave. Then, by the skin of it's teeth, wave 2 overlapped wave 1.

Yet at any of the wave 2 locations (like if you pick the minute ((a)) wave above the current location for 2), then wave 2 is less than a 38.2% retrace. And that means the third wave must be shorter than wave 1. I couldn't find it. I couldn't find it. And that's when the long minute ((b)) wave of 2 came to mind. That minute ((b)) wave is shorter in price and time than wave x1, so it is legal from a  degree labeling standpoint. 

Further, I was looking for a wave 2 that was longer in time than the prior wave minute ((iv)) triangle - so that minor 2 would raise its hand and say, "hi, uh, hello, I am a higher degree wave". This wave 2 location meets that need. Further we needed wave 3 to be entirely below a line from 0 - 2, and while there are several places on the chart that do this, this one fits the bill.

Third, if you plot the hourly Elliott Wave Oscillator - I will let you do this one - then you will find that the wave three maximum is down near than wave 3, and the EWO is coming back nicely for a fourth wave expanding triangle - which three of us found independently during real time. 

But, the wave 4 is quite large, and that most likely means it pairs with wave 2.

I believe the above chart shows that if the wave is to count as an impulse, it must make one more lower low. It turns out that wave 5 can make a new low and remain shorter than wave 3. If not an the invalidation level is back at any wave x1 overlap.

Have a great rest of the weekend,

Thursday, February 27, 2020

Take No Prisoners

The chart below was shown several times before. I do not have too much more to say about it at this time.

ES Futures - Monthly - Back Into Diagonal

What I will say is the down move is starting out like a diagonal retrace. If that continues remains to be seen. The shorter term hourly chart is below. Yesterday I said, quote, "It would be wise to see if the market can make a new bottom, and then cross the upper channel boundary as better confirmation that wave 2 is underway."

Crossing the upper channel boundary never did happen. Today, prices were confusing in both directions and literally sank into the close and into the after-hours. The reason they were confusing was that they contained failure waves (upward) - always difficult to deal with.

Overnight and this morning, blogger BBRider finished a count of a downward diagonal. During the day (in the heat of battle) I said that count could work, but I also said, unfortunately, a 1,2,i,ii lower could work.

ES Futures - Hourly - Below Base Channel

While I initially discounted the 1-2-i-ii for measurement reasons, again in the heat of battle, on review, this count has better proportions overall.

Please note there are fewer candles in the second ((ii)), than 2, and the net distance traveled is less. Further (b) of the second ((ii)) is shorter than ((v)) of 1. The charts are very, very messy with truncations and flat waves.

Again, let me say that upside counting will not resume until this hourly channel is breached to the upside.

Have a good start to your evening.

Wednesday, February 26, 2020

A Mess near the Bottom So Far

Yesterday, we said that in a trending market it is not a good assumption to assume price movement (in this case, lower) was over. It certainly wasn't for the ES E-mini S&P futures which went on (in the after-hours last night) to break the low and break the 3,100 level with some conviction before rebounding a bit.

We also said, that we hadn't seen a wave with enough upside to indicate that a correction had started, upwards. By the open this morning, we saw such a wave. See the chart, below.

ES Futures - Hourly - Correction Begun?

Once we saw the structure of the three-wave move upwards - as a potential flat, we then waited until prices made another 90% approach to the low again. They did that in today's after-hours, as shown.

So, while there are never any guarantees, it is possible the market is making a larger more time-consuming flat (or other complex wave) as its full correction. Reaching the 90% level again makes a compound flat a legal wave by the rules of Elliott Wave analysis. We said, we have no need to break the rules as other sites might. We have no need to fudge. Every once in a while we WILL get a wave wrong, or a failure, or an unanticipated turn on a news story. But, we won't break the rules.

You'll note that the ((c)) wave of a-3 is larger in price than any prior wave, and so the degree of the waves should have turned upward. That does not mean that b-3 can not make a new low. It most certainly can, within limits.

But, the lower ((B)) wave of a-3 is telling. It is likely saying that the market is very weak and that - eventually - there is more downside to come. One tip-off was that the ((C)) wave of a-3 was only countable with a failure wave in it. And when that happened, we noted in the comments that today was going to be a mess and be weaker. However, one might begin to look for an eventual c-3 or c-5 wave upwards, the latter preferred to try to extend the correction in price.

It would be wise to see if the market can make a new bottom, and then cross the upper channel boundary as better confirmation that wave 2 is underway.

Until then, have an excellent start to your evening.

Tuesday, February 25, 2020

Sixty-Plus Days of Trading Lost in Four

Today's additional price plunge has wiped out fully 60+ days of upward movement with just 4 days of downward movement. Prices overlapped the November 15th bar today. This is the definition of 'impulse'.

As far as I can tell, the wave is all-one-movement, and, due to the length of the wave is most probably Minor Wave 1, down, composed of five minute waves - as shown below.

ES Futures - Hourly - Minor 1

Gaps are most usually in the third wave, and that's where this one is shown.  Two of us were able independently to count out the larger minute ((iv)) triangle shown. It is a "running triangle", and that is to be respected for it's lower (b) wave. The collapse that occurred out of that triangle was able to be counted in five waves, with alternation.

We don't know that the down wave is over. That is always a bad assumption in a trending market. The market would have to show that by making a large enough wave to begin a correction. That wave is not entirely in evidence yet.

On the daily time-frame, price closed below both the lower daily Bollinger Band and below the 100-day SMA, so a couple of targets were both met and exceeded.

Note that the wave above does not form a perfect channel. Wave ((v)) is outside of the channel, and this would be expected in an impulse wave. Perfect channels are more a sign of zigzags or multiple zigzags.

This down wave is longer than any of the legs of the triangle, or quasi-triangle that occurred over the summer. That should mean that the degree of the wave has turned, and that's why the wave is labeled as Minor 1.

The primary item of interest to this wave counter is the nature of any retracement that should occur.

Have a good start to the evening.

Monday, February 24, 2020

Now You Know Why

I turned negative on U.S. equities in mid-January when I recognized the market was no longer impulsing upward. It may have seemed a bit too early then. If you have any questions you can see the post at this LINK.

I certainly did take lots of heat from readers who were sure we couldn't be in an Intermediate (B) wave but we had to be in some kind of third wave. But now you know why. I was always trained to "not worry about the last couple of percent". Sorry, but that is my training.  I kept showing a chart that looks like the one, below.

In mid-January, we were near 3,330 and today the futures settled at 3,225 (or thereabouts). I kept showing a chart that looks like this one.

ES Futures - Daily - Diagonal Count

If the above count is correct, then wave minute ((b)) should be taken out in less time than the ending diagonal took to form. Today has a good start on it, but the only definitive resolution will be when a retrace wave does not exceed the all-time high.

For the DOW and the S&P500 there are two ways to make a longer term completed count. They are below.

ES Futures - Monthly - Ending Diagonal Count

The significance of the above chart is that wave 5 of (5) got nearly as long as 3 without exceeding the length of 3 - as should be the case in a diagonal. If there is a further higher high, it would put this count in some jeopardy. If that happens, I'll provide the invalidation point. This same count could apply to the Dow Jones Industrial Average. As far as I can tell, it can not apply to the NDX or NQ 100 Futures - because the last wave is too long. But, that's OK. The NDX is a much younger index with a different composition and different history than the S&P500 or the Dow.

The other count is the one to Intermediate (B) that we have shown many times, and is available at this LINK. It's nice that I can just show you these charts again, so you can confirm what was being thought of at the time.

As interesting as this all is, confirmation - as stated above - is still needed. If the Ending Diagonal should play out, it would sound a pretty tough message to hear because the wave shown above would be an extended Intermediate (5)th wave, of an extended Primary ((5))th wave, of an extended Cycle V wave.

So, as usual, let's keep our wits, our calm and our patience about us. After all, we're just counting waves.

Have a good start to the evening.

Friday, February 21, 2020


We said it would be more convincing that we had started wave (iv) down if there was overlap on ES 3,335, and that occurred early this morning. As a result, there is a bumpy, scraggly, non-overlapping five waves down - with alternation - as shown on the ES 15-min chart below.

ES Futures - 15 Minute - Close Only

At 3:40 pm ET, because of this count, we said that the lowest low at 3,328 could be the end of the five-wave sequence, and to watch for an ES 30 minute outside-reversal candle as a sign the low might be in. By about 3:50 pm ET, that outside reversal bar, up, had occurred, and maintained until the close. As a result, that 3,328 level should be watched to see if it holds as a bottom in the overnight weekend session.

In this count, the alternation is with wave ((2)) being a flat, and wave ((4)) being a running triangle. Wave ((1)) is an impulse and wave ((5)) is a diagonal. As a result of the running triangle, it should be assumed that lower lows are eventually possible. If running triangles are bullish in bull markets, they should be somewhat bearish in corrections.

Keep in mind that the purpose of the running triangle is to "take up time - during the overnight in this case - move prices sideways, and to better equalize the net distance traveled with wave ((2))", which it does really effectively in this example.

Since, there appears to be a diagonal fifth wave - alternatively a larger flat in progress from (1) of ((5)) - then price 'should' make it up over wave ((4)) on order to prove out such a diagonal.

Doing so would likely start the b wave of (iv), upward - again if didn't already start as a larger flat wave, with ((1)) of ((5)) actually being ((5)). 

Have an excellent start to the weekend.

Thursday, February 20, 2020

Marginal Lower Low

If yesterday made a marginal higher high, last night finished the upward fifth wave - or upward .b wave of b that I had in mind - and today made a marginal lower low, then rebounded vigorously. There remain two good possibilities, depending on whether we go over the top tomorrow or back down through the lows.

ES Futures - 2 Hr - Lower Daily Low

Uncertainty is at its near highest here. If we continue lower it will likely be as a choppy diagonal downward. And if we go over the high marginally again, then it could be that the larger b wave downward has finished, and the upward move will be a new location for minuet (iii).

The Dow has made a downward overlap that could be for wave (iv). The ES futures and S&P500 have not. There are times of extreme chop like this when it makes most sense to let the market resolve the structure. The only observation I have is that a b wave here does provide more time to an a-b-c structure and is a bit more proportional, but a new marginal high would be needed to prove that case. I'd like to see a good overlap of 3,335 to indicate that wave (iv) was underway.

Have a good start to your evening.

Wednesday, February 19, 2020

Marginal Higher High

The story lately has been seemingly about overnight gaps up which go on to make marginal higher highs and then sell off a bit. Yesterday, we said if there was a higher high today - which we could see one possibility for - just move wave (iii) to the right until we get a clear downward overlap.

Today and yesterday - from late in the day - we were 'almost able' to count an impulse up. It needs one more wave up, perhaps tomorrow; perhaps not. However, that leaves us with this possibility inside a diagonal wave (iii).

ES Futures - 2 Hr - Within Wave (iii)

Yesterday's current b wave down broke the up-trending diagonal a wave's lower trend boundary. But, it is relatively short in time. This means if an impulse finishes tomorrow and then sinks, there are still two possibilities. It could 1) end wave (iii) with a c wave up, or 2) be only part of a larger b wave flat correction in time and then finish wave (iii) with a more impulsive c wave up.

The internals of the a wave diagonal up were verified. They fit like a glove in both price and time with v < iii < i, and iv < ii in both price and time. Of course wave iv overlaps wave i without traveling below the low of ii or exceeding wave ii in length.

On the larger time scale, wave (iii) is still shorter in price and time than wave (i), and overlap with wave (i) is still be looked for as confirmation that a true diagonal is playing out. All we can say right now is the wave forms are choppy as heck.

Have a good start to the evening.

Tuesday, February 18, 2020

Still On Track

The potential daily diagonal still remains on track. After the higher highs in the future in the overnight session on Sunday, there was a drop in Monday's after-hours session as AAPL provided guidance that the Covid virus might affect it's sales in China.

ES Futures - Daily - Potential Diagonal

The daily RSI is still diverging, and we still need confirmation that wave (iv) is underway. There is still one way that c of (iii) can provide a marginal higher high for (iii). So, if we are in wave (iv) then price should not go over the high tomorrow. Otherwise, there remains room to move wave (iii) to the right.

Ultimately, readers of this blog will recall that one element needed to convince us we are in wave (iv) is to have an overlap on wave (i).

Wave minute ((c)) still remains very near equality with minute ((a)).

P.S. After the close I added this bonus chart of the U.S. Dollar Index. There is a gap around the 100 - 101 level that could fill. And, there is now a higher high than minute ((x)). Note that way the count is described, the Minor B correction took more time than diagonal Minor A, as would typically be expected.

US Dollar Index - Daily Close - Higher High

This chart uses the principles of  degree labeling. Let's see if it makes an accurate prediction of a Minor C wave up.

Have a good start to the evening.

Saturday, February 15, 2020

The Bigger Picture

Let's remember, if for only a minute, that Ralph Nelson Elliott primarily did his work on the Dow Jones Industrial Average (and some averages that preceded it). The S&P500 was not invented in Ralph's day. Apple & Google? Non-existent.

OK. I get it. I know people hate this count. Most people do not like "B" waves, period. Yet, Ralph said they were a reality. 

DJIA Futures (YM) - Daily Close - Intermediate (B)

Yet, from an 'eyeball' perspective, it is hard to deny that every wave above 'fits like a glove'. Yes, the (B) wave is seemingly quite long in time compared to the (A) wave. Still, for the Dow, the pattern has not gone over the 1.618 external retracement of the Intermediate (A) wave as shown by the Fibonacci ruler near the upper border. And, the internal waves of the minor waves have very reasonable proportions to each other.

And look at that channel! Near perfection. From the perspective of 'degree-labeling', there are no 'excuses' that need to be made because the Intermediate (A) wave is too long in price for a Minor wave or a minute wave (as some of the Elliott wave services have suggested). And, the 'X' wave triangle is longer in time than the 'W' wave upward - which means the 'X' wave should at least be of the same degree as 'W', if not of larger degree.

And even counting upward - each of the two waves W, and Y is smaller in price than Intermediate (A). This is another 'excellent fit'. Looking for a third wave? There is no wave yet that exceeds the Minor W wave in length. And oscillators are currently diverging.

But, here's the other thing about this count: if the Intermediate (B) wave ends somewhere in this vicinity - we are still allowing for the fifth wave of diagonal minute ((c)) - then we know exactly what this next downward wave would be labeled. And, so do you!

Well, I hope you have an excellent rest of the weekend.

P.S. This is the second post this weekend, and if you have not seen the first one, you may wish to read it now.

Friday, February 14, 2020

They Know We're Watching

Happy Valentine's Day to all. Still waiting on confirmation that wave (iv) lower has started.

ES Futures - Daily - Potential Diagonal

Have an excellent start to the long weekend.

Thursday, February 13, 2020

Still Crazy After All These Years

With apologies to the song, we found one way we could count the SPY (4hr chart as completed). The chart below would still allow for a more proportional fourth wave than occurred today.

ES Futures - Daily - Complete or Need (iv) Yet

We'd prefer to see the diagonal as having better proportions, but, again, there is one way to count the up move as completed in a tighter wedge. You can see that count at this LINK.

One lesson learned from counting diagonals is that, as rough as they can be on the nerves, and we might prefer them to be over, is to give the market the time to make the typical proportions. The benefit is that the deeper retrace provides more time to diverge against the market internals.

Have an excellent start to your evening.

Wednesday, February 12, 2020

Less Ugly, Still Legal

We spend the day counting out live and in real time the fifth wave of the c wave of wave (iii) of the daily diagonal below. As we said yesterday, just move the (iii) to today's high if a higher high was made. It was, and prices tagged 3,381.

ES Futures - Daily - Wave (iii)

If this pattern is correct, prices should now trade near or below the last blue b wave of wave (iii) to claim we are in wave (iv).

If you are interested in the c wave count up to today's high, please see the comments from the prior post.

Have an excellent start to the evening.

Tuesday, February 11, 2020

Uglier, But Still Legal

Today in the comments section for yesterday's post, we made a case that yesterday and today can constitute "four waves up". That gives us two clear cases for the potential ending diagonal count. The first clear case remains as was posted yesterday. and is repeated below.

ES Futures - Daily - Diagonal Case # 1

But, if today is only four waves up (see this chart at this LINK), and there is a higher high tomorrow, then there is a clear case to move wave (iii) two days to the right - to the high of tomorrow's wave. Then, perhaps there would be a deeper wave (iv) that might improve the proportionality of the diagonal. I'm fine with that if it happens.

Also, the chart in the link shows several interesting items: 1) it shows wave 1 at 12 candles, but 2) it shows wave 2 as 48 candles! This is 4 = x 12 candles, showing that a second wave can be much longer in time than one might suspect. Four times. Wow! 3) It shows that the X wave at the top - when the FED Chair was speaking in Congress - was greater than a 1.62 wave up wave compared to it's W waves down, and yet, 4) a new low was made at below the low of the W wave. One well-known market analyst says this is impossible - his words not mine. Yet, there it is.

Again, so there is no confusion - if there is a marginal higher high tomorrow - perhaps as the FED chair speaks again, then this might become the more acceptable alternate.

ES Futures - Daily - Diagonal Case # 2

If a true daily diagonal does form, it would be quite ominous for the markets, as we have not seen a daily one form since October, 2018. The diagonal should mean - if it completes properly - it is the end of that particular wave. I have done studies on the daily (again using the ES futures), and this up wave 'should not' be counted as a five-wave sequence with a diagonal at the high - not and maintain 'degree-labeling' anyway. The reason is that today wave (iii) became too long compared to where wave (i) would be. Hope this helps.

Have a good start to the evening.

Monday, February 10, 2020

Ugly, But Still Legal

Here's the daily chart. I'm going by the measurements only. A new high for (iii) or a longer fourth wave, (iv) are certainly possible.

ES Futures - Daily - Potential Diagonal

The market has made the current trend lines, not me. I just connected the prices. At this point, I am going to refrain from calling it nested waves higher because of the proximity of the overhead daily Bollinger Band, the diverging RSI, the diverging hourly MACD (not shown) and the over-bought daily slow stochastic, below.

ES Futures - Daily - Overbought

From this chart, as Ira says, keep in mind price is "above" the line in the sand and has positive bias - until it is not and does not. Also, "up" Mondays sometimes - not always - lead to Tuesday reversals. In any event, I'll be treading lightly to heed Ira's guideline of not buying new positions over a daily Bollinger Band. (Not to be taken as trading or investment advice - just a paraphrase of Ira's guideline.)

Have a good start to the evening.

Friday, February 7, 2020

False Breakout

Readers of the blog will note I tried all day today to count an impulsive structure upward. See the last two days notes if you have questions. But, the amount of time this downward wave took exceeded the time of the higher degree waves. Further, today was a bearish engulfing day, and is a real warning sign to the bulls. Therefore, with the daily RSI sorely lagging, it appears the best count is, in fact, the ending diagonal count we showed just a few days ago in a previous post at this LINK.

ES Futures - Daily - Diagonal Count

A wave count of minute ((a)), minute ((b)), minute ((c)) could definitely be to the ending wave Minor Y of Intermediate (B) from the triangle Minor X wave at the bottom of October. We will check other structures carefully over the weekend. And, as an ((a)), ((b)), ((c)) count it would have really excellent proportions with both legs nearly equal in length.

And, we know a few things. Wave (ii) took about eight days, which means that wave (iv) should be shorter in time, say about 3 - 6 days.  And depending on where wave (iv) stops its downward travel, wave (v) should not be longer than wave (iii) in price. And, wave (v) should also be shorter in time than wave (iii), as well.

The signs are encouraging, but let's still take it one step at a time. Some downside follow-through is still needed.

P.S. This is the second post today. You may wish to read the first, if you have not.

Have a good start to the evening.

Needs to Hold About Here

We have been looking for an extended fifth wave in the futures. Because of both the timing and length differences between futures and cash, we can count the cash index slightly differently and still maintain degree labeling. Here is the count on the S&P500 cash index on the 15-minute chart.

SP500 Cash Index - 15 Min - Channel Count

At this location wave ((i)) is slightly shorter in length than 1, and wave 3 works out length-wise as far as the internals go. Wave ((ii)) is a flat, and wave ((iv)) is a triangle for alternation. All of Wave 3 would be above a line from 0 to 2. Wave 4 would be ending in the vicinity of a prior wave 4, and the Elliott Wave Oscillator is giving the classic fourth wave signature. A new high is possible, and even probable.

Provided the fourth wave ends near this location, the futures are just hanging on to the extended fifth wave count.

Have an excellent start to the day.

Thursday, February 6, 2020

IF there is a higher high on the Open

IF, in the chart below, there is a higher high than the wave ((3)) of x5, on the open or after the open, then, just like the Tesla counts we showed in the comments yesterday, it would likely force a count of an Extended Fifth Wave in the ES futures. That is because, wave 5 would become longer in price than wave 3. As the Fibonacci ruler shows, wave 3 is already marginally longer than wave 1, and this is the usual case when the fifth wave extends - so it is not an issue to have an extended fifth wave.

ES Futures - Hourly - Watch for Overlap or Higher High

Within wave x5, if wave ((2)) is a FLAT, then it resolves the potential degree conflict with wave 4 because it's net travel would be less than wave 4, and it would have taken less time. If wave ((2)) is a FLAT, then wave ((4)) is a sharp or triangle yet forming.

Extended fifth waves are typically ending waves, and, then the diagonal construction shown yesterday would not be needed if an extended fifth does, indeed, occur.

The RSI - which is currently diverging - should be watched for further divergence on any new high. And one should make sure than wave ((1)) is not overlapped downward with a critical overlap. The high of the higher bar could be used as a warning.

IF this wave resolves without issue, then the downward retrace has to be examined for extent. It is often the case for extended fifth waves that they are entirely retraced, but for now, we need to take one thing at a time.

Have a good start to the day.

Wednesday, February 5, 2020

Possible E-D for ES Futures

Based on this morning's up move, so far, I can't help but wonder if the Ending Diagonal pattern I envisioned in the Daily Projection chart, isn't arriving just a bit early as in the wave count below.

ES Futures - Daily - Is Ending Diagonal in Progress?

The Fibonacci ruler shown shows that as a sub-wave, wave minuet (i) is smaller by more than 10 points of minute ((a)). Yes, wave (ii) is larger than ((b)), but it is not larger than minute ((e)). This might be allowed.

Obviously, another pattern that visually would work here would be a triangle. And I don't see anything to necessarily preclude a triangle here. The large daily gaps tend to indicate that a triangle or diagonal is in progress.

Regardless, keep a eye peeled on this pattern at the right-hand side of the chart. We'll try to refine it as we go along.

Have a good start to the day.

Tuesday, February 4, 2020

New Highs For NQ

The Nasdaq 100 Index, largely on the strength of Tesla, made a new all-time high today. The ES futures and cash S&P did not, as of yet. If we look at the Nasdaq daily futures, we find a second up wave that is larger than the first up wave. The second arrow is the same size as the first.

NQ Futures - Daily - Count

This daily count offers a count without degree violations. Wave (b) has to be the longer flat if wave iv is to be a sub-wave of wave (c). But within wave (c), wave iii is smaller in price that wave i. So wave v should be smaller in price than wave iii.

Have a good start to the evening.

Monday, February 3, 2020

Loss of Momentum

While many other sites and videos were concentrating on trying to tell you on Friday how they had detected a downward wave in the market, we said in our weekend posts that the task at hand was to concentrate on the retrace wave. They did not say that. We did.

Below is the hourly chart of the ES E-Mini S&P500 futures showing today's hourly retrace wave.

ES Futures - Hourly - Channel

We showed the downward gap. We showed the filling of the gap. We showed the up channel. We showed the 62% retrace level. This is Elliott at its finest. The downward wave is still very choppy, but the market appeared to have lost some momentum somehow by temporarily, at least, stepping out of that upward channel.

We tried counting an expanding diagonal lower, but that invalidated and we noted when it did. So, one structure that tends to step outside of channels is a triangle. Given, that Google's earnings are after the close today, perhaps it is a set-up for their report.

It's possible a triangle is being formed before a last heave-ho upward. But, it is impossible to say without all five legs in place - hence the big blue question mark. Otherwise, the next best idea would be a double zigzag upward.

It would make sense to move a wave counting stop to below the ((A)) wave location, and see if it is honored in the overnight.

Have a good start to the week,

Sunday, February 2, 2020

Smaller and Larger Channel

This is the second post this weekend. On the way up, a number of analysts cited the "smaller channel" shown below, and have noted the recent breakdown of it.

S&P500 Cash Index - Daily - Smaller Channel

Fewer analysts (none I have seen) have shown this larger version of a daily channel in which price is already below the mid-channel line.

S&P500 Cash Index - Daily - Larger Potential Channel

Especially because the X wave triangle above (and noted in previous posts) may have ended at the October 3, low, no particularly special interpretations of this potential channel are claimed. Such a channel might merely be the ((a))-((b))-((c)) channel of the large Ending Contracting Diagonal to end Intermediate (5). If it is not, then it might be a channel for a larger impulse - but we think not due to degree considerations.

But it might not be such a larger impulse. For that reason, if or when price reaches the lower channel boundary, it would be very important to see if support is reached, and how long price remained above the lower channel boundary to test it. We'd note that at 3.150 the lower channel boundary and a line horizontal to the wave labeled extended wave x i would meet and might form a natural target.

We note the daily MACD has turned lower, and neither the MACD nor its signal value is near the zero line.

Have an excellent rest of the weekend.