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.