Above ATH

Today we were counting upward after the possible fourth wave down. First, it was a fourth wave down. It didn't overlap. It hit the lower channel line. Then, after the close today, the ES futures went over the prior high to validate a likely fifth wave higher in the after-hours. The ES 4-hr chart showing the new high is below.

The Elliott Wave Oscillator has turned green and will likely be back above the zero line by tomorrow. In this wave, a reminder in provided that 4,995 is an important level. It is now about 35 points away. If that level is exceeded, then the extended first wave count does not apply any more. If it holds, there could still be a turn within the 13-week turn window. If 4,995 does not hold, the alternate count we showed on Tuesday 30 January's daily chart will apply.

Regardless of any person's market opinion at this point, our count and The Eight-Fold-Path Method did a terrific job of not getting too negative until a fifth wave was seen or not.

At this point, it is only the invalidation point that will tell us what to do. Yes, today was both 1) the first of the month money phenomenon we have pointed out several times in the past, and 2) a slew of large company earnings.

But it is only a valid wave count that gives clear invalidation points to serve as definite anchors for action. Rest assured the Smart Money can count Elliott Waves, too. They know where the invalidation points are too. The problem with bad wave counts is their practitioners don't know where they invalidate. If a wave extends, it extends. It just means that more money is being conjured from a) printing, b) bailing out banks, and/or c) fiscal stimulus.

It is not likely people can set market targets from these fundamentals. Remember, we said that IF the Dow and/or the S&P were to form an ending contracting diagonal then this wave would have to go over the high. It did. That, too, is a benefit of the wave principle.

Have a good start to the evening,

TraderJoe