Upward Completion ?

We waited overnight to see if the ES futures wanted to add any points on to the ending expanding diagonal. It did not and started lower on its overnight open. Yesterday, we said it 'could' fail if it was an ending wave. Apparently, it did. The daily chart of the ES futures thus has some interesting features. Let's cover them.

There are now two gaps on the futures chart shown by the red circles, both of which are not filled. Price today came back to the 18-day SMA, and it will be interesting to see where it closes (it closed below the 18-day SMA, putting the daily bias as down).

Yesterday's ES bar is a lower high (even though cash SPY ended higher there), and today's bar makes a lower low. The prior low is shown by the prior down (red) fractal. But the next valid daily fractal down is not until the 04 Oct 2023 low. Currently, the closest valid up (green) fractal is on the day of 12 Oct 2023.

The daily slow stochastic is still in over-bought territory - meaning it is not over-sold - which is very, very interesting.

The 18-day SMA is making an approach to the 200-day SMA shown. Earlier in the day we commented that the VIX already has an 18-day/200-day Golden cross meaning the 18-day SMA has crossed up over the 200-day SMA. The VIX is at its daily upper Bollinger Band, but it is not in over-bought territory on the daily slow stochastic, and this is also interesting.

From an Elliott Wave count standpoint, we were also able to show this likely ending contracting diagonal on the DJIA (YM) futures 4-Hr chart this morning.

The above count also had nice divergences in the RSI indicator to go along with each diagonal peak. The Dow spent most of the day reluctantly falling. If this is a true ending diagonal, then the start of the pattern should be exceeded in less time than the diagonal took to form.

Have an excellent start to the evening,

TraderJoe