Next Best Number

Regular readers of the blog might be getting - let's call it a little impatient - that I have repeatedly stated that the potential diagonal upward, if it is a C wave, must be retraced fully in less time than it took to build to consider the diagonal as being confirmed. That remains true. I can't account for others' patience or the lack of it. But I will offer a Next Best Number that comes from the study of degree labeling. It is shown here on the ES 2-day chart (roll-over contract).

So, to be right to the point, degree labeling suggests that if we correctly identified the March low as the minute ⓒ wave low of the Minor B wave, then any down wave that is longer than that one should be identified as a Minor degree wave or larger than a Minor degree wave down, or certainly it must be as large as the previous minute degree wave ⓒ, and that would be at minute degree. And that number is 7,207 in round figures.

Notice that would also undercut the prior minute-ii (circle-ii) wave lows, as sloppy as they are. So, given the appropriate backing-and-filling, the odds would likely increase from roughly 95% of the diagonal being confirmed to about 98%.

Why not 100%? Well, there is a reason for the expression involving a certain rotund woman who has a singing voice. That is because a diagonal is what it is. It is a structure of a type. And if the structure is to be meaningful, then it must predict something. In this case, IFF it is an ending diagonal, then it must predict its lower low in less time than it took to build. So, we must leave 2% on the table for the possible error that it is a leading diagonal instead of an ending one. This high up in the wave structure, a leading diagonal seems completely incredulous, but who knows what the FOMC will do? Or what the government will do? So, there are low odds - very low odds we suggest.

Otherwise, if the number is exceeded, we may go down into the free-fall area back to the April lows or beyond.

But anyway, here is a new fairly exact number to ponder over. I'll have more to say on it should the number exceeded. But for now, let's see how it goes. Remember, if we are entering a bear market, stiff retraces can occur at any time, so trade accordingly.

Have an excellent rest of the evening,

TraderJoe