In order to complete today's post, I had to wait overnight to see if the ES futures made a higher high today like cash did. It did. The reason for this was written about before. I had said that a minute wave ((y)) would have to remain 'shorter in time' than the Minor C wave of Intermediate (W), it's larger degree wave in the same direction. Therefore, for this reason, it is necessary to see the Minor B wave as a triple zigzag, now, and it is labeled as such in the chart below.
|ES Futures - Daily - Minor B|
The Minor C wave of (W) was 16-days, and if the minute ((y)) wave was labeled at last night's peak, it would be 17-days - which is not allowed by the principles of degree labeling. This was also verified on a 4-Hr chart, and it is currently indeed longer. Therefore, I will continue to follow the rules.
This Minor B wave seems to be in keeping with some of these key phrases from The Elliott Wave Principle by Frost & Prechter, "B waves are phonies", "speculator's paradise", "orgies of odd-lotters", and "focus on a narrow list of stocks", "non-confirmation by other averages". These phrases appear in the section on wave personality.
The Minor B wave is nowhere near a typical B wave maximum of 1.382 x A, but it has exceeded the 105% needed for an expanded flat. The 1.382 x A level would not occur until 3,348.
Last night an agreement in principle was announced on a new round of stimulus, and some of the details have to be worked out yet. So again, while there has been another internal subdivision of the Minor B wave nothing has changed dramatically in the count. Others have been calling for a crash. I have not been. I'm just looking for a regular corrective 'C' wave at this point to see if a better parallel trend channel can be formed. My main concern is that the put-call ratio and it's 10-day moving average remain in speculative territory.
There should be a three-step 'confirmation' process applied to the likelihood of a downward wave when it is in progress. Step 1 - Overlapping wave minute ((w)), Step 2 - Trading below wave minute ((x)), and Step 3 - Trading below the A wave.
This is still a time to remain patient, calm and flexible.
Have a good start to your day.