Thursday, July 21, 2016

Hourly Futures - 07/21/2016

Here is how the hourly Triangle worked out in the ES futures in the final analysis. The triangle itself ended in an Ending Expanding Diagonal, C wave of (E), with the required overlap of wave (0), and the thrust out of the triangle occurred in five non-overlapping waves in cash, and five overlapping waves in the futures in the form of an ending expanding diagonal. Since that time, there has been a new swing low, and price is being monitored to see if it can make a 1.618 extension, lower.

Running Triangle in ES Hourly Futures, and Five-Wave Thrust Out of Triangle

As we have said before, this triangle 'can' end the upward movement of this wave set in that it would be the final correction before 'the last wave up dead-ahead'. And certainly the presence of a 3:3:3:3:3 Ending Expanding Diagonal in the futures is quite ominous. Technically, wave (5) did not fail to make a new high above wave (B), and neither did it fail to make a new high beyond wave (3) of the diagonal.

Also, the DOW and the S&P made new highs above their respective prior (B) waves, and the Wilshire 5000 yesterday made a new all-time high, joining the indexes that are expressing the Primary V sequence.

However, wave (5) did fail to exceed the length of wave (3) by two ticks - we think that is a reasonable error at this point - given the historically highest level of stock prices 'ever' and the strained sentiment. Still, for something meaningful lower, prices would (and should) accelerate lower from here.

Let's see how things progress. It does appear we are in a correction "of some degree". We need to see if price will start 'impulsing lower' for a larger wave set, or whether they will only slowly decline in another corrective wave.


  1. Joe.............would it be safe to say that if this down move could exceed 2159 (or so) that it would favor the fourth (before the last wave)?? Also assuming the 3rd wave ended at 2175 where would your projections be for 5 and the end of V? Thanks much

  2. John, as far as I can tell, there is a 60:40 chance that we have topped for at least the short term. I think you are referring to a Tony Caldaro count; not mine. I will address the possible long term scenarios in an upcoming blog post. First, I need to see if the down wave puts on an acceptable fourth wave (flat or triangle), and then makes a fifth wave lower. I will not place the cart before the horse.

  3. nope not TC's count - thanks for the update J

  4. Tks for the appreciated update Joe.