Odds About 40:60 Higher v Lower

Right now, it is a fairly even situation. The Principle of Equivalence tells us to be patient, calm and flexible until 1,2,3 is proven to be A,B,C. What makes the odds so split can be shown in the daily four-block of the US equity markets, below.

As you can see, the Dow (upper left) and Russell (upper right) have already overlapped their first waves up. They are the weakest. However, the NQ 100 (lower left) and the ES futures (lower right) have not done so. It's a pretty split call but the Dow and Russell are disqualified from a further impulse upward.

Meanwhile, back on the weekly chart - as a reminder - the alternate count is shown in red, below, on the close-only chart of the ES futures.

The alternate is still alive in the ES. If the down wave ended in this neighborhood (200-day SMA), then a fourth wave, 4, would have alternation with a second wave, 2. The fourth wave has reached 38.2% retrace in 120 weekly candles. It could go lower.

Some factors that make this the alternate are 1) the up wave, 3, did not make it to a 1.618 extension. Not fatal, but of note; 2) the daily bias is still lower with an embedded daily slow stochastic; 3) prices are still in a down channel and would not really alter the count unless they closed up over the red ⓑ wave shown.

Since we are talking about a marketplace in which we are the small unknowledgeable players, I suppose a lot of the waves from here will be made by the Smart Money and the machines, particularly with the law makers as insiders on how they see the government funding bill going. They will probably broadcast their intentions only to other large money players when it suits them.

Other items that remain conspicuous in their absence are 1) the lack of a well-defined triangle before a market high, and 2) the lack of an ending diagonal sequence in anything but the DJIA to end the prior wave, and 3) the lack of an ending diagonal at Primary, Cycle or SuperCycle level to end a larger fifth wave. There is a way one could be made but price has to defeat that red ⓑ wave, higher, first.

Have an excellent start to the evening.

TraderJoe