Another Downside Set Up?

Yes, folks, I am presenting another downside set up. We are about even in this region with regard to the ones that have had some follow through and the ones that have not. But, at this time, I would be remiss in my obligations as an analyst to at least point it out.

From the high we struck last week, there is a reasonable count for 5 waves down into today’s low. While we cannot see what is in the gap down, which does force us to do some guess work, I am assuming that the bounce after the Sunday open is the 4^th wave and the lower low this morning is the 5^th wave in wave I down in the c-wave. Again, I cannot tell for sure, but this is an assumption.

This now makes the bounce we have been seeing during market hours a wave ii. Therefore, should we break down below this morning’s low, the i-ii we have developing seems to be pointing down to the lower end of the target box on the 15-minute ES chart.

The alternative count I am noting on the chart is that we still have higher to go in a more protracted b-wave.

I know many of you are still eyeing that yellow count with the alternative wave (iv). But, as I said before, as long as we remain below the wave 2 low struck on September 3^rd, I am going to be seeking downside resolution. Should we break out over that high, then we will likely be moving towards the yellow count.