Close Call

With the invalidation yesterday of the downward expanding diagonal we showed in prior posts, and conversion of some of it's waves into triangle format, that left a count that we labeled yesterday tentatively as a 5-3-5 structure. On the ES hourly chart, we may now be working on that last -5 as shown in the chart below.

After the ((e)) wave of the triangle, there are currently three-waves up, and a fourth wave down if it doesn't invalidate. Readers should verify that all of wave ((iii)) in this count is above a line from wave ((e)) to wave ((ii)).  The ((e)) wave is the 'origin' or 0 point of the new upward wave. There is a Flat for wave ((ii)), and as it sits now, wave ((iv)) is a longer-in-time sharp wave for alternation - provided it does not invalidate. As it was, wave ((iv)) was so long that it created a 'close call' with overlap.

Intraday today, we showed the Classic Pivot Points, and the support at the low of the day on/near the Daily Pivot Point (PP). We then began counting upward on the ES 5-minute chart, as below.

It was an 'all-day-grind' with higher highs and higher lows which we suggested 'might be' an Expanding Diagonal. It was not until the start of the next session that we were able to verify that wave ((5)) had crossed 3,633 and thereby officially made wave ((5)) longer in price and time than wave ((3)), which was longer in price and time than wave ((1)). We had previously verified that wave ((4)) was longer in price and time than wave ((2)) - meeting all of the minimum the requirements for an expanding diagonal.

There is no guarantee that the upward movement is over. Sometimes wave ((5))'s get very aggressive. But, when the proposed diagonal has ended, then it must by rule stay above the origin of the pattern for a Leading Diagonal - otherwise it is ending.

Again, the ES keeps making these expanding patterns. It may have something to do with the Expansion of the money supply by the Fed. It may not. But, I'm not asking these patterns to be made - I'm just counting what I see according to the rules.

So, do have a good start to the holiday if you are celebrating it. I will be.

TraderJoe