Modification to Up Count

The Dow futures have not made a new all-time-yet. We suggested they could. Today cash Dow made a new closing high, but not a new all time high either.  The daily Dow futures (YM) chart is below.

Dow Futures (YM) - Daily - Working on all-time-high

In the ES futures, we have been counting upward. We have done that since price again crossed up and over the 18-day SMA. Today, we ran into a length violation which requires a slight modification to the up count. First, we want to show the intraday ES 30-minute chart, below, with the RSI indicator.

ES Futures - 30 min - Channel

The RSI is clearly suggestive that a third wave is in progress. Prices did attain the level of iii = 1.618 x i, and perhaps overnight Sunday and into Monday a series of waves will wrap up wave iii, and a non-overlapping fourth wave iv would then follow.

Back to the ES 2-Hr chart, because of the length violation, the chart modification looks like this.

So, we maintain because wave ii was so shallow, then wave xi was the extended first wave in the sequence. And now, because wave (ii) is so shallow, it suggests that wave x(i) is the extended wave in the sequence, also. That means that wave (iii) is likely to remain shorter than (i), but it should form a full five waves upward - even if only in overnight sequences. Clearly, here too, the RSI is showing a third wave signature - and a partial one at that.

There is one alternate I can think of, and that is that prices are forming a-b-c of a diagonal (i), instead, but it is much too early to consider such. We will keep it in mind, particularly if or when the Dow goes over the high.

Have an excellent start to the weekend and the holiday if you are celebrating in the USA.

TraderJoe