Will the 5th Wave in S&P500 Happen?

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Today we sold off into the 4pm EST close at 2175ES (E-mini S&P500 Futures) as we had into Fed minutes for tomorrow Wednesday at 2pm. That’s the first time in a while where we ended the day at the lows.

Is that a bearish sign? And what happens next?

Well, if what happened today is a 4th wave, then it’s possible to have an a-b-c 5th wave up according to the red line.

081616-sp500-line

Without the blue and red lines, here’s the same chart:

081616-sp500-hourly

The Russell chart also shows an ending diagonal pattern.

081616-russell-hourly
Ending-Diagonal_L_Line-ChartsThere’s no guarantee that this chart pattern will play out – or that I recognized it properly. But as long as 2175 ES holds as support, this remains a possibility.

If broken, however, downside towards 2140 ES is likely.

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