One Down

Thanks to this morning's CPI report, one gap in the downward direction was filled. Not the first one down, the second one down. It is shown as the black circle on the daily chart of the cash SPY index, below. There is another small gap nearer the high on the up sequence.

The market gapped down in humorous fashion, leaving another large gap on the chart. Volume picked up a bit, the Dow broke its diagonal (noted yesterday) lower, the tentative parallel above was broken lower, and two of us were able to count 'five-down' with lower lows for the ES, YM and NQ futures by the end of the day. I say 'humorous' fashion because it is really silly that the game is structured such that everyone has to wait until a certain minute and then hit a buy or a sell button at that time, fighting with the news-reading algorithms that can outgun any human. And then, of course, the cash market is closed at that time, and it's another lurch to wait until the open and see what more volume does to the market. Why these news reports don't come out with the cash market open is beyond me. It really seems like another way for the big players to get an unfair advantage against the retail trader. I don't have a co-located server, do you?

From a wave counting perspective, with five-down we now need to see whether the high holds, and if it does whether 482.50 is exceeded lower. If so, we may be well on the way to Minor A down of Intermediate wave (4).

Have an excellent start to the evening,

P.S. I put this chart together last night after the close, as the composite of the triangle I suggested and the expanding diagonal that BBRider called was completed as well.

I do find the count compelling as all the right waves are in the right place and there is "post pattern confirmation" of the diagonal and the triangle having been exceeded lower, the diagonal in "less time".

TJ