Speed Comparison

A look at the ES futures 4-Hr chart below shows that, regardless of the prior peak from which the measurement is taken, the recent up trending wave occurred in less time than those two waves.

ES Futures - 4 Hr - Faster Wave

So, while valid retraces can occur at any time, and perhaps some quite significantly, Neely's work suggests this is a significant criterion on which to base the suggestion of a new wave to be counted upward. The upward wave has already reached the 50% level of the entire prior down wave.

Again, with the internal count of the recent wave on shorter time frames, we cannot find a valid reason to discontinue counting upward at present.

So far, this suggests the recent potential truncation was called properly on the correct day. It also ups the odds that the prior all-time-high might be exceeded higher, although this is not for certain. 

One tip or trap to watch-out for: if people start calling for an ending diagonal wave without the first wave having gone over the prior all-time-high as a foundation, that call would likely be incorrect.

Supplemental: the Grind is on and something reeks again. Have a look at the chart below of the SPY 15-minute cash. We can easily see from the Fibonacci ruler on the left that the largest decline, here labeled ii/b, exceeds the 50% level. This should be sufficient to allow for an extended third wave, iii near the 1.618 extension.

Ok. Fine, I can easily go with that. But now observe a few items. First, in the upper left is an extension Fibonacci ruler. Right now, the extension is only near equality. Therefore, we should carry the labels a, a,b,c as well as the numbered labels. Also, note that the only truly big gaps in the third wave are downward gaps. Why is that? Who ordered those?! Where is the big impressive upward gap? Maybe it will happen on Sunday night. Price is still trading within the channel, and we don't know just yet. But the secondary labels are also being shown in case price runs into the upper daily Bollinger Band (in this area) and decides to reverse. In that case, perhaps a leading diagonal larger (a) wave up is being started as part of a larger diagonal wave 5, upward. Then, maybe an ugly 50 - 62% retrace takes place for a (b) wave of that diagonal, with a (c) wave that goes over the top.

It is very hard to say, but because iii is beyond equality, we should at least rule out the xi count in this case.

Have an excellent rest of the weekend.

TraderJoe