The ES daily swing line has wobbled a bit but has not set a clear new downtrend yet. Prices on Friday overlapped the prior high but not by enough to draw any firm conclusions yet. The daily chart is below. Prices retreated from the area of the upper daily Bollinger Band as expected, especially given the daily slow stochastic is over-bought only (for two days). The third day needs to be watched closely to see if gains the embedded status or not.
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| ES Futures - Daily - Into Minor B |
Meanwhile, two other overlap levels are shown which are of interest in ruling-in or ruling-out counts. In particular, we note that if L#2 is exceeded it would probably be below the 18-day SMA and might set a trend.
In terms of an EW count, we still see the Minor A wave at the July high, and the new August highs confirm that the early August drop was only a three-wave sequence (probably ending in the diagonal we counted).
Again, we have no proof positive upward movement is over. It is possible for a Minor B wave to form in numerous ways including: an expanded flat, running triangle, or even more complex Flat-x-Zigzag, Flat-x-Triangle. Those patterns are in the book for a reason.
Have an excellent start to the weekend,
TraderJoe
If a flat is unfolding wouldn't the current wave up also have to be counted as a three?
ReplyDeleteGranted every apparent reversal in market these days seem to be negated with laughable predictability, we do appear to have an intact island reversal in small caps and an exhaustion gap in Nasdaq. We also happen to have an H.O. (Hindenburg Omen) on the clock
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