Can Be Complete

Yesterday we noted the outside reversal day. We also noted it was a day when a possible truncation occurred. Today was follow-through upward on the FED meeting results. That makes this picture of the S&P500 cash index possible. And it makes going over the highs again possible.

S&P500 Cash Index - Truncated Diagonal (Bullish Falling Wedge)

I suspect things might have turned out differently if Russia had not invaded a foreign country and had the PPT (PWG) not gotten involved to prop up the market during times of uncertainty. You and I will note the market never got to over-sold technical extremes: there was only a bounce off the lower daily Bollinger Band. So, how else did this happen if it was not over-sold? Anyway, it is no concern of mine. My role is to try to count waves properly given the odds. For now, ES 4,100 is a price barrier to have to defeat lower.

It is likely cash closes should try to hold above the declining upper diagonal trend line if this count is correct. Price closed over the 18-day SMA (or the 'line in the sand'), greatly reducing the odds of a near term decline, but not the certainty. For that reason, I will be monitoring the expanding diagonal possibility, and will update that as something becomes more certain.

I will note that the Dow did make a completely acceptable expanding diagonal downward. I commented on that when it occurred. The S&P500 did not, however.

Have an excellent start to the evening.

TraderJoe