Woo a Potential Triangle, Don't Marry It

Below is the daily chart of the ES futures. The potential triangle we have been trying to count can be seen between the blue converging lines in the middle-right of the chart.

If a lower low is made in the YM futures, then it is possible to count five waves in both the ES and the YM futures. But, as noted previously, there simply are no guarantees. The structure could break up as well as lower. IF it breaks up, then it is likely the second wave, ii, of the structure.

At the end of the day, prices were left nearer the highs than lows. But a wave ((E)) in a triangle was not invalidated yet. If there is to be a fifth wave down, the wave should likely impulse, but we can also see no reason why it could not diagonal. One issue might be timing, as below.

Tomorrow is the last trading day of the month, the quarter and the year. It is possible that it will be a sloppy or a down day to accommodate "window dressing" prior to the potential standard inflows we have written about that accompany a new month, new quarter or new year as money from company bonuses, pension plans, 401k's, dividend roll-over schemes, etc., enters the market. 

So, an impulse down might we well-timed to set up the market for a rise in the new year. It does not have to happen that way, but it could. If so, look for a significant gap in the overnight.

I should also note, that the daily slow stochastic un-embedded for only one day. Therefore, it has indeed re-embedded, even using the standard calculation.

Have an excellent start to the evening,

TraderJoe