Gap & Grind

ES futures largely traded lower overnight and created a significant gap for the cash market as the SPY cash 15-minute chart below shows.

Prices got down to the 90% level of the prior up wave. (By now readers of this blog should know what kind of wave formation that measurement allows). Then, after the first cash bar, the market turned and began to grind and grind and grind higher - like a coffee bean grinder that is left on, runs out of beans, is fed with more beans, runs out again, etc., etc.

From an Elliott Wave perspective we can count the grinding as some or most of five-waves-up which is perhaps not complete yet - given that the after-hours cash is even higher. So all-in-all, the day's price excursion gives added weight to the alternate (red) count on the 4-hr chart shown in the prior post. It is interesting that the most impulsive direction (down, in cash) results in higher grinding highs. This is not typical, but it is what it is, and it is why we are so calm, patient and flexible at this time.

It is very clear to me some Smart Money player is "clipping" the lows trying to trap neophyte money for the balance of the day when they assume new lows will occur which don't. Nasty stuff.

Have a good start to the evening,

TraderJoe