Trillions More?

In a lesser reported - but still important - story House Democrats were poised to vote on the second of the Administration's stimulus bills (see story at this LINK). The market likely got wind of this today, and much of the market headed higher. Like it or not, the market has now created the situation that we must reconcile in terms of degree.

Until three weeks ago, the up leg since November 2020 was shorter in price but yet longer in time than the leg from the March 2020 low to the August 2020 high. But now, the second leg can also be viewed to be longer in price, too. That means the two legs should be of the same degree or the second leg is of a higher degree. But, yet, in price, only a rough measure of equality exists; there is not a 1.618 relationship. Therefore, until and unless there is a clear fourth and fifth wave higher, as per The Eight Fold Path Method, we will label the legs per the Principle of Equivalence - just as I would do on any smaller degree wave.

At this point, one can only talk about probabilities, and the probabilities are only slightly favored for the (A),(B),(C) count because in a (1),(2),(3) count then wave (3) breaks a trend line from (0) to (2). The (A),(B),(C) might still be to a larger Primary ((B)) wave.

Could there be a turn lower soon? There could, but, so far, it is not on the board. The signs of excess abound. Will one man and one woman (Manchin & Sinema) stand between the American people and their trillion or so dollars? It's hard to know.

Meanwhile, back at the chart, the ES daily slow stochastic has embedded again. There is a divergence of the Dow and Russell from the rest of the market. And daily price is not in contact with or over the daily Bollinger Bands. Price is over the 18-day SMA, and any higher all-time-high, like what happened in the NQ futures today, will also turn the swing-line up. Today was an outside-day-up forming a hanging-man candle in the ES. 

As we showed in the comments, it is possible a barrier triangle or diagonal might be forming IFF (if and only if) a new high is made in the ES - like it was in the NQ.

Have an excellent rest of the evening.

TraderJoe