Tuesday, September 27, 2016

Update on Potential Minor wave A of Intermediate (3)

Here is a very brief update on potential minor wave A of Intermediate (3) of Primary 5 (circle 5). We said in previous posts it was very possible that the A wave up was taking the form of a contracting Leading Diagonal. Nothing has changed. Downward movement after the Grate Debate (sic) last night did not invalidate this possibility in either the futures or the cash. Here is the hourly DOW as a reminder of the count.


Potential Leading Contracting Diagonal for Minor A of Intermediate (3) in the DJIA

So far, within this wave we are getting the deep retrace - - on an hourly closing basis of 78.6% in the DOW for wave minute ii (circle ii) of A. Upward movement has apparently started, and price found initial resistance at the prior gap.

Because we counted the down sequence in live chat, as an (a), (b), (c) zigzag, then this fully completes minute wave ii (circle ii). If upward movement of minute wave iii (circle c) has truly begun, then we can move up the invalidation point for minute wave iii (circle iii) to the low of today. Again, notice how few Elliott analysts tell you the clear and precise invalidation points for a count.

We have now sketched in tentative diagonal trend lines assuming that minute iv (circle iv) also makes about a 78.6% retrace, but first we need to see the minute iii (circle iii)  wave develop properly. It does not have to make a new all-time high, but it easily could - just depends on the lengths of the waves at the time. Wave minute iii (circle iii) however is required to make a new high above wave minute i (circle i), for the entire diagonal to be counted properly.

The most important concept we want to stress is that "counting risk has gone up" in the market. Look at the ranges being made, and how many points it takes to validate a count now. That may not change for quite a while, and we suspect that if it does it would be a surprise to the down side.

Meanwhile, we are staying relaxed, patient and very flexible. Hope you are, too!

9 comments:

  1. Hi Joe, a question about "right look". In the wave ii that has ended recently at 18049.34, subwave (c) is much longer in length than subwave (a). Overall, does this wave ii has the "right look" of a zig-zag pattern?

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    1. Yes. As a matter of fact it is 'how' diagonals and triangles both take their peculiar shapes. You know that each structure contains zigzags, right? It is because diagonals contain zigzags that are so non-proportional in their a & c waves, they they expand or contract.

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    2. Thanks Joe. Yes, through your sharings on this blog, I know that both triangle and diagonal contain zig-zag. I would like to ask two more questions,

      (1) if the zig-zag in diagonal can be double/triple zig-zag?

      (2) one of the five subwaves of a triangle can be a complex pattern - i.e. double/triple zig-zag - am I correct? In the case of double zig-zag, must it be zz-x-zz ? Or there must be alternation as in zz-x-triangle or zz-x-flat?

      Thanks and cheers!

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    3. Hi Joe,

      Where can I read more about the subwave patterns and their rules/guidelines? Example: diagonal is made up of zig-zag subwaves and length of subwaves i > iii > v, ii > iv, etc.. I'm very interested to read up more about these details but don't remember coming across them in Prechter's or Neely's books.

      Thanks and cheers!

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  2. Hi, please may I ask if you only consider the Cash index charts or do you also look at the Futures' charts? The reason I ask is that the above chart of the DOW hourly looks like it is for the Cash index. However in the futures there was an overnight ramp up to over 18200 before it came back down for the final 'v' thrust in time for the opening bell.

    Of course that completely changes the look of the chart and hence my question about whether you consider the Futures' charts.

    On a different topic, I am currently logged into blogspot with my name clearly being shown. However the 'Comment as:' drop down box doesn't include the 'blogspot' ID. I don't like posting as 'Unknown' and would like some instructions on what I need to to so that my name appears next to my posts.

    Many thanks for your detailed analysis.

    Purvez

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    1. Hi. Yes. I do look at the futures charts. The ES futures did the same thing as the YM futures. As long as the futures don't travel out of their respective boundaries, the diagonal count may still apply.

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    2. Google says, "The name published with a Blogspot comment is the name provided to your OpenID provider. If there is no name associated with the OpenID account, it will show the user as anonymous." Please check the settings if/when you registered an OpenID account to be sure it shows a name. Sometimes there is a setting like "Show Name As .." that you may have to select.

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    3. Thanks for your response. I understand what you are saying about futures staying within 'range' but surely the wave count is now quite different. How do you account for that is what I'm trying to understand.

      Regarding my name appearing next to my posts. I only have a Blogspot registration and a Google one. Both have my name and show it in appropriate places. I'll need to delve into OpenID to understand what it is.


      Purvez

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