Can It ?

In recent days, we proposed that it was possible a diagonal was forming on the daily chart, as bias had flipped to upwards, and there was a contracting sequence. That sequence is diagrammed below on the chart of the ES/SPY (CFD) in the 4-hr time frame.

Clearly, with tonight's "Pakistan Proposal Pop" entered before the 8 PM deadline, there is now a 5-3-5 sequence upward. Tonight price is still over the 18-day SMA with the bias still positive, although the daily slow stochastic has now entered the over-bought region. And this post is also being made before the 8 PM deadline.

Today in the comments for the prior post, we clearly stated to handle this up wave with care and posted an a-b-c with a strong, clear warning that the 'c' wave could morph into a wave iii given the news background. That happened and more.

Now the question is with the 5-3-5, up, will a non-overlapping fourth and fifth wave form to convert the diagonal into a full-on impulse. That, too, depends on the news, I guess. So, there is no need to get too fancy here. Again, let me be clear, depending on tonight's news, this up wave could fall apart without forming an impulse. But it could just as well add the -3-5 to make a 5-3-5-3-5 impulse.

And that's why one is patient, calm and flexible in the current environment. It is very difficult for retail to flip the switch and/or reverse as quickly as can the news-reading algorithms owned by the big players.

So, have a good evening. Let's see what happens from here.

TraderJoe