Morning Dump

There remain a variety of ways to count the structure we’re in. If my preferred scenario is correct, the rally is corrective in nature—strictly speaking—but will also go very high.

On that interpretation, we actually emerged from a triangle down there around 5/25 (the green “B” below) and we are in an impulse wave to the upside for green “C” (of a larger “A”). If that’s the case, today could be finishing the blue “2” of that 5-wave structure. I continue to expect us to travel to the upper rail of the bull flag.

ES

A different bullish alternative is that the green A-B is itself a 1-2, and this thing we’re in today is the 3-4. On this interpretation, we should still expect the 5/30 high to be taken out at some point. I don’t like this as much, for two reasons: everyone’s going to count it this way (and so it’s probably wrong), and this “feels” too sharp of a drop for a “4.” They tend to feel less worrisome by nature and this pullback feels scary.

And finally, if I’m wrong to be bullish here, this is the other scenario I am watching out for.


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