July 12, 2022

S&P 500 / Elliott Wave Update 7/12/2022 by Michael Filighera

Tuesday’s trade saw the buyer’s step into some of the tech titans during the Globex session with the ES getting a bit of a boost off the Globex lows. While the opening in the ES did see a boost on the opening reaching the session high at 3876.  The move itself wasn’t as impressive as in the NQ.  Once done though the sellers took over and in the next 15 minutes dropped the ES 36 points to the morning low at 3840.  All the movement though did allow additional insight to what is likely playing out in the ES.

I have labeled the 3922 high as the completion point for wave C of Minor 4.  But before I jump to the conclusion that Minor wave 4 is complete and we are dropping in the Minor 5 wave, I need to consider the possibility that Minor wave 4 is forming an a-b-c-d-e triangle pattern.  If this is the case, we need to allow for a D wave to drop down to support at 3804’ish before again turning higher forming a 3-wave pattern to put in wave E and complete the triangle and the Minor wave 4.  The resolution of triangle patterns under Elliott is that once complete they will “thrust” out of the triangle going the length of the triangle as the expected Minor 5 wave takes over.

If though, the markets decide to “puke” after the CPI number, the ES would/could pick up the pace to the downside breaking below 3800 without any real problems and drop fairly quickly down to 3741.  Ultimately, if Minor wave 5 is in force the 11068 low should be surrendered as the ES heads toward support at the 3500 area.