Breech of Up Trend Line

As prices continued lower today, we noted during the day that price was down to the daily closing up trend line. As the daily closing chart, below, shows, price pierced it lower.

Assuming the Intermediate (Y) wave is completed, then it ended on a double-divergence with the MACD on the (W) wave. 

 

ES Futures - 30 Min Close - Three waves down

During the day, wave counting downward continued. So far, to today's settle there appear to be only three waves down: a/i, b/ii, c/iii. These waves are to be counted completely equivalently until or unless there is a reason not too. The two biggest reasons not to count them equivalently would be 1) if there was a clear non-overlapping fourth wave up and fifth wave down, or 2) there was upward overlap which would indicate either the end of the down move, or a possible diagonal lower. (At this point in time there is completely insufficient evidence for any diagonal lower.)

So, we will see how these waves develop in the near term. It will be important to know if they form a five-wave or a three-wave sequence lower.

Have a good start to the evening.

TraderJoe