Just Gets More Messy

As I said in my weekend update, I have been hoping for clarity. Yet, that is the last thing the market is providing to us at this time. Let me explain.

Normally, when you have an (a)(b)(c) structure for a b-wave, the (c) wave takes shape as a standard 5-wave Fibonacci Pinball structure. And, within that 5-wave structure, waves 1, 3 and 5 divide in 5-wave structures themselves. This is what we call the fractal nature of the market, wherein movements are variably self-similar.

Moreover, when a b-wave completes, and a c-wave begins, that is also usually a 5-wave standard Fibonacci Pinball structure.

Yet, I cannot say that I am seeing any CLEAR 5-wave structures in the move down from the high struck last week. And, since the decline from Friday’s high is also not a clear 5-wave structure, I have to now assume that this b-wave – if it is indeed going to take us lower – is a more complex and lesser seen (w)(x)(y) structure.

The other side of the coin is the lack of a clear 5-wave rally off a possible wave 2 low, as you can see on the 15-minute ES chart attached. Therefore, I am assuming the b-wave is not yet done, and we are in the midst of a (y) wave decline within the b-wave.

Yes, this has, in fact, become more complex, despite our desire for clarity and simplicity. And, since we do not control the market, it reminds me of an old children’s rhyme: You get what you get and you don’t get upset.  And, even though I have outlined two potential paths, the complexity opens other avenues and paths as well.  But, for now, I am limiting my analysis to these two paths,

So, while we can control our ability to be upset or not, I still do not have a solid tradeable pattern to which I can point and say that it has a high probability upon which you can deploy money. And, that applies to both directions now, as I have explained above.

Therefore, for now, I remain a spectator as I attempt to make sense of this complex structure taking shape before us. And, it leaves me viewing pressure as being to the downside as long as we remain below Friday’s high. Should we break out over Friday’s high, then I have to likely adopt the 1-2 upside set up, which suggests we are on our way to the wave (v) target overhead.