I hope $ES is finally going to give us a trending market. The move off yesterday’s lows is off to a great start. I would count us as being within the 3rd wave of minuette (orange) degree. The typical length would take us to the orange box, but it may also extend to either of the two extensions above that if it needs to (or even higher, too, but that would be getting extreme). After the 3rd wave is complete, we would like to see a 4th, then a 5th to complete minute (blue) 1 before getting a 3-wave pullback.
Keeping in mind that I could be completely wrong (it’s FOMC day and these can do quite unexpected and wild things), I may be able to rule out the “deeper minute (blue) 2” discussed earlier. The depth of the selling today makes it—on my interpretation—more akin to a 2 (of subminuette [red] degree).
If we rally from here in a third wave, the expected length of that red 3 should carry us to the orange target box, but since that will give the structure as a whole a “stubby” look given the depth of the two, I won’t be surprised to see us extend to one of the higher fibs above the orange box either (noted by the two orange horizontal lines).
I’m getting about 20-30 comments every day saying things like this ad nauseam: “Christmas rally,” “You’re early, bro,” “Too soon,” “Not yet,” “Patience,” “One more high, bruh,” “5000 first, then we drop,” “Dude, your timing is off,” “b-but the Fed,” “b-but corporate buybacks,” “b-b seasonality” and on and on and on and on.
And yet, we sold off sharply at the highs (a warning), $JNK and $OIL both look like shit, and we’ve had some successful bear flags of late, which I haven’t seen in a long time. We had a nice, big one on $ES that did just what we like them to do. My members are also watching one on $RTY (here), and now we even have this bear wedge on $YM as well:
I have rarely seen so many people in such a froth to get in long at any price in my life. Give me some bullish structures and I might, at the very least, consider it. Until then, nah thanks.
If last night’s rally on $ES was the last hurrah, and the subsequent selloff a first impulse wave to the downside, I am inclined to count today as a two, which may be interpreted like below. If they can breach the top of the triangle, it should produce a short squeeze that can take us to 4715 which is the 78.6% retracement of the prior decline and the subminuette (red) c = a.
I last discussed $FBhere. In that post, I upgraded the count to a nest of ones and twos because the depth of the recent selling was more akin to a 2 than the 4 I had previously expected. Now, why would one want to do a nest like that? Well, for one, in a market that just will not die, it seems prudent. And, at least from the COVID crash lows, we only have three swings, like this (green arrows):
My last call on $ARKW was here. Now, while we are moving in the right direction, I am seeing topping signs in many places, and the bears might have the bulls right where they need them to be. So, I am cancelling that call. A couple of reasons, the biggest one of which is the extra dip we’ve had since that original call (which has become minor [green] B on the count below). It makes counting that whole thing as a “2” a bit odd, because it’s now so big.
So, reconsidering the structure, it all counts well as a correction, too, and we would expect intermediate (orange) B to top out right in the range of the box it’s in now. This breach of trend line might very well be a terrific bull trap. The expected target for another leg down in the correction would take us to the orange box below, and I think there is a very good chance we may do so.