It's a Mess, but it's Our Mess!

Yesterday, we cautioned that today was the end of the month, and it could bring some sloppiness from typical month-end window-dressing. That is one good way to characterize the way the day traded. We noted yesterday that price had hit the upper daily Bollinger Band, and that is often a place where the so-called Smart Money takes some profits off the table. Here is the daily Bollinger Band view.

So today was a small down day and can represent some consolidation of the recent up wave. Can a higher high be made? It can. Yesterday, we also showed this count in the ES 1-hour futures.

We noted this morning that a fourth wave had hit the lower channel boundary, and there was a bounce. Is the fourth wave over? Well, while it has done the very minimum that a fourth wave needs to, it could do more. The reason? Cash indexes, like SPY, have not come close to their lower channel boundary yet. So, they might form a larger flat wave, or form a triangle against that daily upper Bollinger Band.

Note the difference between the cash SPY channel above, and the futures channel previously shown. For reasons of form and proportionality, it would be more likely that that SPY trade below the EMA-34 and maybe contact the lower channel. That might bring the Elliott Wave Oscillator (EWO) closer to the zero line.

So, keep an open mind to the various forms of fourth waves (flat, expanded flat, triangle, etc.) and let's see how this works out. Then, let's see if a further fifth wave forms in the upward direction. For the moment, we're taking it step-by-step.

Remember, tomorrow is the first trading day of the new month, and this often brings some inflows from the usual sources (we noted some yesterday).

Have a good start to your evening.

TrasderJoe