And the Only Thing to Worry About Is the Weird Structure on Futures

Alright, I can clearly count a impulse wave down from Friday—on cash, which is just what I was expecting on Friday (here). That worked well, I saw what I thought was a little misleading ending diagonal triangle for the truncated top of the market, and we’ve done nothing but sell off ever since.

But—there’s always a but: though we can all see a rather impulsive decline on cash, quite frankly, this is a really weird structure on futures, to be honest:


And unlike cash SPX, it does not look like an impulse wave, at least not a normal one—or the one I would like to see here. Way, way too much overlap at the wrong places, and not enough 5-swing moves internally. And if I knew nothing about the world and was asked to count this blind and dumb to the world, I would suggest an expanding diagonal, like this:


But doing that raises a special problem. Internally, it is composed if 3-wave moves. And diagonals can do that, but only one of the two: ending diagonals. Ending diagonals are 3-3-3-3-3 structures. Leading diagonals are 5-3-5-3-5 structures. And if we’re coming off a “top,” since this is pointing down, it should be a leading expanding diagonal (a “1”) not an ending diagonal.

So this is weird.

If it’s “ending,” what is it ending? Given it’s placement, and the fact that it’s pointing “down,” it would have to be a “C-Wave.” Odd.

So, we can’t depend on the futures structure as well as we can on cash, but there remains a possibility that this is still part of a large consolidation, and we haven’t topped yet. I don’t think that’s likely, but it’s possible. This could still be part of a huge “4th” wave, and we still don’t quite have the top in yet.

If so, we might be doing this:


“C-waves” are often “impulse waves” and diagonals are a form of “impulse waves.” And a C-Wave would be an ending diagonal, never a leading diagonal. And since this is composed of 3-waves moves, and if it is a diagonal, it’s an ending diagonal.

It wouldn’t necessarily even have to print a new “actual” high in price for the blue 5 (but it can). It only needs to take out the high of blue 3 (or hell, it, too could even truncate and it could still become a “right shoulder” up here). Don’t know.

But, my point is: I am already expecting higher prices in the short-term (here), and I’m even expecting quite a squeeze at the end of that, but if things get even more squeezier than I am expecting, keep this thought in mind as a possibility. It is a weird structure, and it could be merely part of a corrective structure still. These three dramatic falls—the red 1, 3 and 5 in this “funnel” we’re in now. A little odd to do that coming off an actual high.

Ok, so, I will keep this in mind. Let’s see what happens. Possible for bulls to have a little more to them.

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