Divergences Across the Board

One of the reasons I began to doubt the bullish count and lean to the bear count is the mounting divergences we have formed across all US indices (on the hourly, which is suitable for this wave degree). This usually signals that we’re ending a move, not that we’re in the middle of it, nor anywhere near the beginning of it. In order to break these divergences, the indices would need either to accelerate up from here (virtually impossible given the run that’s already been had), or to consolidate quite a bit before making another go. But even in the latter case, I wouldn’t expect to see the big RSI peaks where we see them, so I think the whole move is more likely ending rather than preparing to continue (though of course I can be proved wrong on this).

I will present the divergences here for you. They’re quite sharp and well-defined.

$ES:

ES

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A Structural Comment on the $NDX

As I have the $NDX labelled here, I see the potential for an excellent example of alternation. If the low is in here (as I suspect it may be), then we may be able to interpret it as an expanded flat for minor (green) 4, which would tie in nicely with minor (green) 2, which was a clear zig zag.

We reached the lowest GEX print in its recorded history yesterday, which is probably an insanely bullish metric.

If it seems ridiculous that I keep looking up, please forgive me. I believe we remain firmly within a bull market and the surprises, in the long run, will be to the upside, not to the downside.

(Speaking of which, and speaking of alternation as well: since we had a “flat” for intermediate [orange) 2 over there on the left, guess…you guessed right: we should have a zigzag for the orange 4 off to the right; that’s going to feel like a crash and should be plenty of fun to play.)

NDX

We Need to Be Cautious About Expecting Further Correction Here

Looking at all of the indices together, we need to be cautious about expecting a move up, followed by another swoon (expectation for that was noted here). There are signs that the correction may be over now. Some signs:

All we need are three wave moves. $QQQ has exactly that, in the wedge. It is common for these to complete a low, then a lower low, then it’s rippy time. So, the green 4 I am expecting might be in now, not at another low. We’ll know because we’ll break out of this wedge.

QQQ

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