Today the S&P 500 (SPX) and Dow Jones Industrial Average (DJI) made new all-time highs. The move up since 07/27/21 has been slow and choppy. What’s particularly interesting is the action after the important US Employment report on 08/06/21,which was bullish. The SPX and DJI made new highs just after the open of their sessions and the trading range for the day was made in the first hour.
The Market Profile method describes this action as the second weakest of the seven possible degrees of directional conviction. The trading range for 08/09/21 was also established in the first trading hour. Today’s trade action had medium directional conviction – fourth in strength of the seven degree’s. However, the break of the first hour of trading was to the downside.
The follow through after the bullish Employment report has been anemic.
The 15 – minute SPX chart courtesy of Trading View illustrates a possible Elliott wave count.
A choppy motive wave is the signature of Elliott wave – Ending Diagonal Triangle (EDT). These are termination patterns that appear only in the fifth wave position of motive waves and in the “C” position of corrective waves. EDT’s are the only motive pattern in which each sub wave divides into three waves.
Note the move up from 07/27/21 could also be the later part of an EDT that began at the 06/21/21 bottom. This alternate count will be discussed in a future blog if necessary.
On 08/11/21 at 8:30 AM – EDT the data for the monthly US Consumer price index is released. It’s possible this report could trigger strong directional conviction.