Follow the Procedures

Given the break lower of the last daily down (red) fractal under the alligator indicator (Bill Williams), it is time to propose the base channel downward and suggest that as long as price remains in the channel, it is bearish. The count uses the "awful" five count I suggested previously. In that count, wave 2 down from the January high is a Flat wave, so there is no overlap between waves 4 and 1.

The "five up" in late March converts easily to the Minor C wave of Intermediate (B)/(2).

There is acceleration noted in the count, the EWO has again turned below the zero line. The alligator has curled lower. The degree labels are consistent. The next daily fractal break lower is not until under the Minor B wave low.  If the lower parallel is significantly broken lower, then the labels will likely revert to (1)/(2) from (A)/(B). Right now there is no proof that a larger diagonal isn't being formed lower.

Please keep in mind that back in this post on January 15th - more than three months ago - I presented a count that could explain a top at that location. (See this LINK.) Therefore, literally nothing to the downside will be surprising from a wave-counting standpoint. By contrast, any new higher high must prove itself by getting over the current wave Minor 2 fractal.

The first down leg to Intermediate (1) is/was very messy. The second down wave to Minor 1 was also very messy. Perhaps this down wave will count cleaner. We shall see.

If we are going to make an Intermediate wave (3) lower, then more than likely the EWO need to make a new lower low than the January low. The wave labels on the right-hand-side are place-holders only. They are not intended to indicate extent or locations of the ends of waves at this time. Certainly, a downward wave of equality or 1.618 would not be out of the ordinary.

There was an earlier post on Friday, if you have not seen it. Have an excellent rest of the weekend.

TraderJoe