EOD: Strong bounce off minimum 'diamond' target zone shows some weakness short-term. Breadth showing some daily declines but needs to print a weekly decline to count for anything here. Trend is still positive.
Note that the DOW appears to be lagging the SP-500 but is now trying to catch up. It may be close to a nominal wave 5 first watermark high at 32,308 zone (+2.7% higher = nominal length touch) inside that wave (nominal length wave 5 = length wave 1) which could be an equivalent watermark to the ES 3918 zone shown below in that instrument (chart comment- "higher targets begin"). When they have both hit similar high watermark wave targets (nominal now or optimal later when length wave 5 = wave 1 x fib. factor) , the real fireworks may begin. Not there yet but may be close to a first watermark reaction if there's a wave 5 timing/price confluence imminent between the DOW and SP-500. Could happen this week. Need to see DOW hit 32,308(+) zone to fully catch up. It is currently at fib 76.4% of wave 5 nominal target and that could be a sufficient watermark on the DOW for a short-term reaction.
Overnight- "diamond" breakout was tested a few cents shy of target and held so far.
Update 2:09pm EST:
ES futures hit the minimum 'diamond' target and is now retesting it's breakout from it. While it is overlapping back past the 2/10 -11 highs, it looks like this leg may conclude as a corrective up from here.original post:
Keeping an eye on 'c3' light blue border at 3971.25 zone CASH for potential short term pullback during pre-topping process... 'c3' could also co-print a small yellow 'v'. There still is no clear signal on breadth regarding a medium/medium-large degree top so far.
VIX volatility VVIX is still elevated and needs to make lower lows prior to a medium/medium-large top printing so despite potential whip-saws, new all-time highs potentially taking out ES 4010+ need to print.
"Crash" talk is gradually being replaced by optimism - a good sign for a pending topping process.
On another note: Bitcoin is flying high like there is no end in sight which is another indication of extended investor euphoria. Where does it 'top' ?- we have not done an analysis on it but perhaps we might try to see if there is any discernible structure to it. Quick look see- it could be close to a wave 3 top but it is at length 2.75 x wave 1 from the wave 2 low in Feb 2019 which qualifies as 'extended' so in 'normal' structural terms, there could be a wave 4 pullback pending in the near future and then off to new highs. If it does a 'normal' wave 4 pullback, it could go into the $30,000 price zone before taking off again in a wave 5. It's a dodgy proposition as the chart has gone almost vertical since 12/21/20 and if there are only 3 waves to the structure, there could be a severe collapse. It requires no nerves or those of steel to negotiate this kind of volatility. We like to sleep nights- you can't measure the value in that. Be wary- stress will terminate you as fast as a bullet when applied for long enough and at a sufficient dose. Be disciplined enough to be content with modest 'ok' gains and keep living a life. The current times are particularly nasty already without additional burdens out of our control.
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