We lost our impluse ;-(!

Let's start our discussion with what happened on Wednesday. What looked like a nice impulse wave gave way to a nice ABC. How you might ask? Didn't it just keep going up? Why yes it did, but as it did it lost all kinds of impulse wave attributes and took on motive wave attributes. In my wave counting I have learned that certain wave attributes commonly appear along with the technical indicators. The picture above describes all the areas that are 'red flags' for me in counting the last move as an impulse move. Now certainly I could be wrong on this. And if I am, I would expect us to take out ES 918 early next week. However, this is depicted as my scenario 3 wave count.


The 2nd picture is the same price action on a 15min chart. I think it better tells the story of an ABC. The 3rd picture is the same thing on the 5min chart with the appropriate Fib relationships labeled on the chart along with the anticipated price action.

Now for where I think we go from here. I have three 60 min charts shown in order of preference.


Scenario #1: B wave triangle. This certainly has all the makings of a B wave triangle and should get wave e down to ES 855-860 area before making a massive reversal to the upside. Our wave 4 target would be in the ES 940 range and then another quick reversal to wave 5 lows that would eventually end our Primary wave 1/A bear market and give way to a 3-6 month rally to SPX 960-1050 range to finish off Primary wave 2/B of this bear market.



Scenario #2: B wave ZigZag. In this scenario we likely close the SPX 800 gap before moving higher to a wave 4 target of SPX 960.


Scenario #3: B wave ended with a failed wave C and after a 50-61.8% retracement we move to our ES 940-960 target to finish off wave 4.