All-Day Struggle

Overnight, the market as measured by ES futures made a lower low, and overlapped the minute ((i)) wave in the series, invalidating the alternate only, and reinforcing the primary count. From the time the cash market opened, there were an initial five-waves-up that we labeled as a diagonal. That appears on the left-hand-side in the ES five-minute chart, below. All-day the futures struggled to get over the high again. Perhaps they will tomorrow.

ES Futures - 5 Min - Diagonal and Correction

After the diagonal, there was a three-wave choppy sequence lower in a channel that made a 62% retrace wave, and we cautioned that it was possible to go back over the top of the diagonal. Price broke out of the channel shown to the up side, and broke the first blue (up) fractal back at the 3,674 level. Then, price retreated into the futures settlement.

In the overnight, one should keep an eye out to see if the last sequence at the end of the waves is a ((1)), ((2)) or not. That means the ((Y)) wave should not be exceeded lower. If the high of the diagonal is exceeded, then it is possible that the second wave up on the hourly chart is trying to extend in time and price.

At the time of the settlement, the ES Daily slow stochastic lost it's embedded reading. The only day it can get is back is tomorrow. Otherwise, it might mean that price and the 18-day SMA try to come together.

Today, we also showed this chart, below, of what is likely the fourth wave sequence in the Eur/USD futures (6E), as price is still in a channel, and the Elliott Wave Oscillator has now gone below the zero line.

Remember, as a fourth wave to alternate with wave ((ii)), it could do several things including exceed the high in a "b" wave, or form a triangle.

Here is my own original observation on what the Gold futures market might be doing. I have not seen a count like this elsewhere.

Gold Futures (GC) - Daily - Diagonal

It certainly looks like all of the patterns to this point are three-wave zigzags, and wave ((iii)) is shorter in price and time than wave ((i)). Further, barely, just-barely, wave ((iv)) is shorter in price than wave ((ii)). Meanwhile it is much shorter in time. As such this pattern would invalidate above 1,882.30 if these quotes are correct. Then, it would be a question of whether wave ((v)) remains shorter in price than minute ((iii)). In any event, with the invalidation level so close in price, it bears watching.

Have a very good start to your evening.

TraderJoe