ES

The market decisively broke out of its consolidation today with volume better than the last 10 trading days, but still not as much as the July 8 down day. Range was 27.75 handles.

It appears that we finished another extended 3 of wave 5 (white). If this is correct, we are in the process of working on 4, which has taken the structure of a expanding flat.

This is a fairly deep retracement for a 4 wave, having surpassed the 50% retracement mark. It is also a very extended flat correction. The low of 962.75 is within a few ticks of the 361.8% projection. Makes you wonder...huh?

Bottom line is that we should see one more last little push to complete 5 (white) of A. Keep in mind, there can always be truncation of the 5th. This means that it does not actually surpass the 3rd wave high, or just barely exceeding it.

I bring this point up due to the fact of the deeper retracement we got with 4. Once 5 counts - it's finished, even if it hasn't reached the 3rd wave price level.

Regardless of where 5 finishes, that completes A and an intermediate sized correction will unfold. It will take the form of a zigzag, flat or triangle. It is way to early to determine which structure will play out. I can assure you that it more than likely will be choppy with hard to discern subwaves. What else would they give us...something easy?

Not only did structure tell us that 3 was nearing completion - RSI was screaming it as well.

I have two sets of channel lines on this chart. Notice the dark red one, which is the 2-4 line. Look how the mid-line has a done a pretty decent job of providing support and resistance, including today's highs.

This was the big triangle that I was looking at yesterday. My best guess is that it is not a triangle, but we did have a smaller one.

It really makes no difference, however, in the overall count. What matters is where 1 starts.

They were buying - what's new. I see R3 up there at the highs.