Despite us continuing to be rangebound, and thus a little unclear on the next direction, I do favor the bear count still on $ES. There are a few reasons.
First, let’s look at how this could be counted internally.
- One thing to note is that in contrast to the last bear counts, I have upgraded the wave degree from minuette (orange) to minute (blue). The reason for that is that if this is the beginning of a move down, the structure has become quite large for minuette degree.
- What this could mean, since I believe we need to go very low to complete minor (green) C, is that minute (blue) 3 could be a monster, extending perhaps all the way to the 3.618 extension, before flagging in the 4th wave before then giving us an equally deep 5 (or a 5 that is even longer than 3)—the extension in an impulse can happen in any of the 3 motive waves.
- I have noted the invalidation level for this count. Above this, and perhaps this crap we’ve been in has been a B wave.
- This count looks great because (on my labelling here) minute (blue) 1 is a clear 5 waves, but minuette (orange) b is not. And anyone who wants to count this as a correction has to ignore that and pretend like they don’t see that. That little b is a clear 3-wave structure, and a correction here shouldn’t end on one of those.
- That said, the invalidation level is ridiculously close to us and I won’t be surprised to see it breached because we’re so close to it now and the market tonight just keeps melting up right now. But, it’s not over ’til the fat lady sings.
The other reason are these damned risk signals I watch. They rarely let me down. If equities were set to pump hard, I really cannot comprehend why some of things I look at look like crap here. Bitcoin will just not get its legs here. Also, I want to show you a view of $JNK vs. $SPX. While the S&P 500 has made a series of higher highs, junk bonds have consistently made a series of lower highs. That is something that tends to happen before major corrections. It would be far better here if junk bonds would take out at least its November high.
So, we’ll have to see what it does here. It looks like it wants to keep pumping all night, and I’m sorry if it does as I haven’t been calling for that very aggressively.
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