Year-End Clean-Up

I was looking over both the down count and the up count, particularly with an eye to try to explain just where this recent accelerating wave came from. Also, I wanted specifically to see if I could find any counts that channeled particularly well, and/or had good Fibonacci relationships. In this regard, we also note the ES futures (continuous contract) are already over the prior 2022 high - while the SP500 cash is lagging a bit. I expect that might be resolved in the New Year. OK, so here is the first channel count: the down count from 2022 on an ES 2-day chart.

ES Futures - 2 Day - Down Count in 2022

The only satisfying count I can find that meets these criteria is a Leading Contracting Diagonal A wave, followed by an Impulse C wave where B is a complex Expanded Flat. In the count C < A in the channel (about 78.6%). This allows the downward wave to be counted as either Intermediate (A) down of a large Expanded Flat or Intermediate (2) down of a Primary Contracting Ending Diagonal, up. 

Now for the up count since the October low.

ES Futures - 3 Day - Channel Count Up

What struck me about this most recent up wave is where did it come from? It seems to have third wave acceleration characteristics, and one must remember that C waves are in third wave positions. So, do we overall have an Expanding Leading Diagonal A wave, now proven by an already higher impulse C wave? Again, both of these counts are in a channel, and the alternation in the corrective wave would work well.

Further, within the expanding diagonal A wave, wave minute-v (circle-v) is 1.618 x minute-iii (circle-iii), and if a non-limiting triangle is considered for minuet (b), then within minute-v (circle-v) minuet (c) = (a), another excellent Fibonacci relationship. And, from a degree perspective wave Minor B is the largest down wave on the chart.

So, now if there is a simple zigzag A,B,C up, then it is even more possible to have either an Intermediate (B) wave, up, or an Intermediate (3) wave up, over the high, in a Primary 5th wave contracting ending diagonal.

We must be clear. There is nothing to conclude yet, that the up wave is over. Tuesday is the start of a new month and a new quarter which may see the characteristic flows from the usual sources (pension funds, 401k's, company bonus plans, dividend reinvestment schemes, etc.). So, we will continue to count locally while we note these potential relationships.

Have an excellent end to a somewhat confusing, but, albeit better year.

TraderJoe