I have no expectations. I am open minded. In the ES (roll-over contract) 2-day line chart, below, there are other ways to draw this parallel. But this one is shown given the data available. Prices could always move lower first. I can even think of ways they can.
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| ES Futures (Roll Over Contract) - 2 Day - Parallel |
Still, from Minor A, there is a clear three-waves down to minute ⓐ, three waves up to minute ⓑ, and arguably five waves down to minute ⓒ. And there is now upward overlap on minute ⓐ again. Further, the ⓒ wave reached a target of 1.618 x wave ⓐ, subtracted from wave ⓑ. This is shown by the Fibonacci ruler on the chart, and it is a very common flat target.
So, the instructions in The Elliott Wave Principle by Frost & Prechter are, "Draw a line from the start of A to the end of B, and place a parallel copy of the line on A to help find locations for the C wave." So that is what has been done, above.
Yes, this up movement could just be part of a second wave, but it is too early to draw that conclusion. It could also easily be a part of the Minor C wave up. Further, the decline so far has taken a Fibonacci five months (approximately from October to March, give-or-take).
So far, the B wave has only travelled 0.236 x the length of the Minor A wave. And this seems much too shallow for a true second wave. But this might fit the personality of a "B" wave in a "too-far, too fast diagonal". Look at how shallow the retraces were in the Minor A wave.
So, can new highs be made before new lows? They can. And can new lows be made before new highs? They can. Therefore, the local technicals rule until we know more. The wave counting is difficult. The trading is harder.
On the daily ES chart, price is not up over the 18-day SMA yet. So, for-the-moment, the daily bias remains down. But the daily slow stochastic is still in over-sold territory which is not supposed to attract a ton of new selling. And, as mentioned in the comments for the prior post, POTUS is speaking tonight so volatility is expected.
Further, Friday of this week, which is a holiday, the Non-Farm Payroll Report is scheduled to be released. Talk about a messy situation all the way around. Be careful. Be patient. Be flexible.
Have an excellent start to the evening,
TraderJoe
