You Can't Count 'Zero' ..

In Elliott Wave analysis, one likes to think they can identify the starting and ending of wave terminals cleanly, so they can indicate the potential wave structure. But something has been increasingly happening in today's markets that makes that more & more difficult. A one-hour chart of the ES futures in Ichimoku format - just for some color and to show the overall hourly trend - is below.

Notice the number of times that a wave bottom has varied by zero, one or two ticks. This to me seems statistically highly unlikely at random and instead hints at some mechanism involved. What's operating might be as simple as "traders try to buy a double-bottom or sell a double-top". Maybe so.  Maybe not. It might be more nefarious, or it might be an artifact of machine trading.

This situation is not confined to the ES futures. It has been happening a lot in Crude Oil (CL) futures, too. And serious students might take some time to examine those instances as well.

Regardless, this situation creates a higher degree of uncertainty of the wave counts around the points indicated. Will price drop through the former low? Will it exceed an equal high? Who can say. But more importantly look at the sizes of either the second or third candle in the sequence for those noted. That upward candle is no slouch. Someone is playing this double-bottom game for real-zies. They appear to be using it as a trap & turn, so it seemed worthy of pointing it out.

From a wave counting perspective, of course, it makes it very difficult to say if the prior wave is truncated (as in a truncated 'c' wave), or whether the new equal or one/two tick higher low is actually the start of a new sequence.

In any event, the phenomenon is clearly leaving its tracks on the price charts, and it is likely significant turns will be noted by busting levels like that.

Have an excellent rest of the evening,

TraderJoe