Simple, Not Easy

Below is the count we posted in the comments today of the expected potential diagonal in the 15-minute cash SPY/SPX. There is a way to count 'five-up' in the futures, too, but it does not 'look' as quite as nice as this does. We said the first up wave in cash this morning did not make it over the high, and was likely an 'a' wave of iii. The second high did exceed the prior high and can be the 'c' wave of iii. The high during the FED news conference can be seen as the vth wave high.

SPY Cash - 15-Minute - Potential Diagonal

So now, the task become simple - but not necessarily easy. The high must be monitored to be sure it is not exceeded. (Otherwise such a pattern could be a 'leading' wave and not an 'ending' one.) And, the low of the diagonal, the start of the diagonal, needs to be monitored to see if it is taken out in less time than the diagonal took to form. Since the low of wave ii has already been exceeded lower, the next milestones are the ((B)) wave of i, and then, starting to fill the gap.

So far, all the right shapes and time expectations are met. And it is a reasonable sign that price back-tested the underside of the lower diagonal trend line and failed. (It could back-test again if it wishes). It is also a good sign - as we wrote about in the comments that each peak occurred on a successive lower high of the RSI indicator on this time-frame.

We will monitor the high with you. If it should be exceeded, then price may try to head more to the 62% retracement on the ES 2-Hr chart. But, for now, we just count what we see,

Have a good start to the evening,

TraderJoe