Elusive Wave

Most Elliott analysts do not like to provide even a hint of the difficulty in their efforts to determine their one true Elliott Wave count: you know - like the one that a major service provides which has almost always been grossly off in its timing. And you know why: if they admit fallibility or indecision - even with alternate counts, they fear their readership will decline. That is one of the benefits of an unpaid blog. We can speak our mind and tell it like we see it. 

With that background, we admit clearly and loudly that the upward wave and it's constant grind is very, very tempting to count as a five wave sequence. If so, this is probably the best way to do it.

ES Futures - 30 Minutes - Impulse Version

But sharp readers of this blog will also note a few things in this chart - which does have a requisite 140 candles on it (from the range of 120 - 160 recommended) and could be counted as an extended first wave. The first and most glaring issue is that in this style count wave (ii) which is the longest retrace in time does not even retrace 23.6% of the first wave! That, in and of itself, should raise more than one eyebrow. But the second thing to note is in regard to the Elliott Wave Oscillator.  For neither the second nor the fourth wave, there is no travel below the zero line. This again seems very unusual but it reflects the lack of retracement also.  Another thing to note are the lack of real long and impulsive wave segments. By that I mean really large upward bars similar to the large downward bars that preceded this entire wave. Thus, the whole wave looks like a grind upwards rather than impulsivity in the futures, even though there are, indeed, gaps in the cash chart.

So, another way to count this very same wave is the following.

ES Futures - 30 Minutes - Corrective Count

As such, the first thing to note is that the (c) wave might not be done yet. There are enough waves for it but the latest peak could also just be iii of (c). So, there could be a further high on Sunday/Monday. In this format, the very small wave retrace would belong to a (b) wave, and the zigzag is corrective.

There are not many times that I have run into a wave this long-lasting with such a small retrace (even given it may be anticipatory of a stimulus deal).

So, all I can say is that I am willing to live & learn and see what lessons this wave has for us. In turns out that both counts can fit in a potential Minor B wave count as follows. First, for the five-wave sequence.

ES Futures - 4 Hr - Five Wave Count Incorporated

And now for the three-wave sequence.

ES Futures - 4 Hr - Three Wave Sequence

Either count has it's good and bad points. Neither breaks the rules. A lot will depend on any retrace waves - if and when they occur - and whether the lower parallel trend line is broken. And so here it's a really excellent strategy not to get too emotionally adhered to a particular variant at the moment.

Have an excellent rest of the weekend.

TraderJoe