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.