Stimulus Bill Passes on Weak Momentum

The stimulus bill passed both houses of Congress today. The market applauded weakly. If the market is making the expanding diagonal downward shown yesterday in the ES futures, then this might qualify as its wave (iv). This is shown on the SPY, below. I checked that the ES futures can count the same. This chart is just less busy.

SPY Cash - 15 Min - Diagonal c ?

Prices turned to the right, and traveled out of channel. They appear to be wedging now in what might be an ending contracting diagonal c wave. At this point, the measurement is c = 0.618 x a. Depending on what happens in the overnight, there might be one more last lurch up. Or, prices could give way and head lower. Filling the right-most gap (red circle) might be a sign that price is going to come down out of the clouds for now.

As I said in the comments, the above pattern can also be counted impulsively with the following relationship: v = 0.618 x net( i through iii). If the pattern is a-b-c, then its low should bust. If it is the impulse version, then new highs can be made.

The Russell 2000 futures are in an interesting location. They have broken their upper declining trend line. If the downward pattern is a leading expanding diagonal, then the high must hold. If, on the other hand it is an ending diagonal (or just the three zigzags shown in red in an expanding formation) then the prior high can bust. No matter how it goes, I'll respect the market's decision knowing that the pattern is at least counted correctly.

Russell 2000 (RTY) Futures - 4 Hr - Expanding TZZ or Diagonal

 In both cases I hope you can see how true Elliott Wave alternates can be formed.

That's it for now. Have a great start to the evening.

TraderJoe