To clarify my position. Last night, when my prior bear count was invalidated, I offered a bullish $ES count here. I did that because the price action could be counted as a somewhat large 1-2, and it looked like we were going to gap up hard in a 3rd wave. However, as we gave that back, I offered a couple of bearish possibilities (here and here).
Giving that rally up with such a nice impulse wave allows us to continue to accept the risk signals we’re seeing at face value. Perhaps they do mean something after all. So, until those signals change or the price action starts going up too much for the bear counts to be valid, I will stick with them.
There are two ways I can count today’s price action.
1. Minuette (orange) 1 followed by a 2, followed by subminuette (red) 1, and we’re still in the two. This would imply a Sunday night rally either to the top of the orange box or even higher.
2. The alternative is that micro (purple) “B” from above is a leading diagonal instead, in which case we would expect a huge gap down on Monday.
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