Bing, bing, BING!

No. Ricochet Rabbit yells "Ping, ping, PING!" (or often heard and written as "Bing, bing, BING!") right before shouting his own name - Ricochet Rabbit - as he bounces off objects. This was confirmed in autographs signed by the voice-over cartoon actor. But today, the ES futures on the daily chart, can be seen bouncing off the bottom Bollinger Band, and without hardly stopping at the 18-day SMA, ricocheted to the upper Bollinger Band.

The Principle of Equivalence says there are at least three good ways to count this formation. They are listed below.

• First is minuet (a), (b), (c) of minute ⓥ failure. This formation would seem to 'rush' the count as degree labeling can not be used to confirm the lengths of (a) or (b), we don't know the up movement is over, and there is no overlap of concern at this time.
• Second is smaller degree sub-minuette i, ii, iii of minuet (a) of minute ⓥ. The supporting evidence for this is that the hourly MACD is on a high, we don't know the up movement is over, and there is no overlap of concern at this time.
• Third is even smaller degree micro Ⓐ, Ⓑ, Ⓒ of i of diagonal minuet (a) of ⓥ to extend the entire sequence in time and try to get the waves to survive until the end of the year.

There is, of course, still the option of a third wave up because in contracting diagonals, the smaller up waves, and the smaller down waves still fit in with the nested 1,2,i,ii scenario which always, always, always makes counting diagonals tricky.

At this point, the middle scenario is the most reasonable. This is counting the three up waves as i, ii, iii the three sub-minuette waves of minuet (a) until we know more, there are some confirming overlaps or news reports that dump prices. This would also still allow for the Elliott "over-throw" if that should occur, after the under-throw that we wrote about in the prior post.

At the moment, the daily bias has instantly turned from down to up. But there is no swingline trend: just a lower swing-line low, and a higher swing-line high. The daily slow stochastic is not over-bought yet, but I'd watch tomorrow's readings. Further, as things were still settling out, on the NYSE there were only 1,527 advancing issues versus 1,226 declining issues on a day which could easily have seen a ratio of 5 or 6 to 1. It didn't. And, again still settling out, there were only 26 new 52-week highs on the NYSE versus 154 new lows. So, some stocks are behaving against the rally - which is interesting.

For our part, we continue to measure & count; measure & count. Can I say it again, "measure & count" as best we can and look at the evidence. We'll not predict the future - especially not when The Principle of Equivalence tells us there are multiple scenarios with odds spread out amongst them. The odds above can be roughly rated as 25%, 50%, 25% for the three scenarios. Today you saw how fully seven closes occurred over the upper intraday Bollinger Band which had odds rated at 0 - 2%, and yet that occurred before prices closed back inside the band. Granted it was an intraday chart. Still. if 1% events can happen, one has to be very, very judicious with 25% events - or else one is just gambling, not using wave-counting skills for what they are intended for.

Have an excellent start to the evening,

TraderJoe