No Blinders On

Regular readers of this blog know that in order to have flexibility and patience, it helps to have a Plan B. If one is operating a business, one does not assume Plan A is infallible and has no chance to fail. Therefore, a Plan B - or in Elliott Wave work - the most reasonable alternate is looked for and developed.

BEST INTERNAL ALTERNATE... (working chart)

From the 15 June low, the best internal alternate I can find for all the overlapping waves is a Leading Contracting Diagonal, followed by a triangle, followed by an impulse wave upward. The sequence counts as minute ((a)), minute ((b)) and minute ((c)), and is shown below.

 

ES Futures - 4 Hr - Internal Alternate

 

The reason this count is the alternate is three-fold. First, it is highly unusual - but not against any strict Elliott Wave rule - to have a triangle follow a diagonal. The second reason is that looked at in this form it initially looks like wave (i) of minute ((a)) is the shortest wave in time within the diagonal. It turns out that there is a way to rectify this as there is another series of overlapping waves on 13 Jul than can make the current location of (iii) be (i), and then (iii) is moved over to 12 Jul and (iv) is a brief overlap on 13 Jul with (v) as the higher high. But, that pattern does not have a good 'look' to it, even if technically correct. And third, wave (i) 'can' be counted as a "three" or as a "five". This was noted at the time.

In any event, the minuet (e) wave of the triangle minute ((b)) wave has the needed overlap with minute ((a)) wave, and this eliminates a potential degree violation in the minute ((c)) wave up. Further, this count eliminates the problem with a potential ending diagonal to wave (b) of the triangle, which did not perform as an 'ending diagonal' in that its beginning was not exceeded lower in less time than the diagonal took to form. This internal count suggests that (b) wave is the simple triple zigzag alternate for a diagonal.

AND IT'S IMPLICATION FOR THE DAILY CHART ...

So, if there is a simple three wave sequence upward internally, then a very good alternate for the current daily count is this one - just upgrade the minute labels in the 'working chart', above, to Minor Labels.

 

ES Futures - Daily - Corrective

 

Again, almost regardless of the Elliott Wave count is the fact that the trend lines the market has drawn - as below - still indicate the "squeeze play" in progress. And, if, in fact, there is a legitimate triangle for a Minor B wave, it might signal that the last wave in the sequence is the one we are in now.

 

ES Futures - Daily - Squeeze-Play Trend Lines

I need to be very clear about one thing. Other counts that you might try do not allow the overlap of the triangle's (e) wave with the minute ((a)) wave - as required by the rule. I have tried many others. Maybe you will find one that doesn't violate other overlap criteria and publish it.

 

This is the second post for the weekend, and if you have not seen it, you may want to read Friday's post, first.

Have a great rest of the weekend,

TraderJoe