Friday, November 18, 2016

Five Waves Up

As of today, we successfully counted five-waves up in the SP500, and E-mini S&P futures. The significance of this is two-fold. First, with five-waves up in the direction of the trend - one should expect at least another five waves up - albeit after a correction.

Secondly, we are finally able to place the latest A wave up of Intermediate (3) on the two-daily chart, as below.

SP500 2-Day Chart - Five Waves Up to A

Next, some will say that the five-waves up could also be a minute wave (i) of a much larger Intermediate (3). And, again, while we are not ruling out an impulse, when we just look over the wave above, it is very hard to find impulsive character in it. So, the "look" right now is one of a diagonal.  That means wave Intermediate (3) has high odds of forming as three-wave zigzag, rather than a full-on impulse.

We can not say for sure, yet. But we do find it telling that a wave A may have stopped short of making the new all time high - perhaps as a warning. Certainly, there is no signature on the EWO of an impulse third-wave. The EWO is still diverging. Then, too, as we were counting waves today, we noted that the DOW may have slightly truncated it's fifth wave up - where the S&P 500 completed it successfully - another possible warning sign.

So, we remain patient and flexible, and continue just to follow the rules and guidelines as best we can. (And let's see how many web-sites and bloggers begin to follow this count and post it as their own - as they get whipped around in the near constant chop at the moment.)

As usual, I will indicate that the downside invalidation level for this count is below the low of wave (2) on the cash chart. Each of the Dow, the S&P500 or the ES may make one more higher daily high as part of the A wave, without affecting the overall count, (and that would likely have to be Monday or Tuesday), but another new high is not required in the A wave. It counts acceptably as it is.

Have a good weekend!



  1. hi joe
    I'm your comments for quite a while since France or I live

    Very good discount
    Of you the vague 5 will end in how long ??

    thank you

    1. Most likely between December, 2016 and March, 2017.

  2. Thanks Joe! You seem to have a good touch with the EW counts - which cannot be said for many blog posters in the net. How do you keep yourself "objective" for market moves when doing the analysis? At least I have tendency to lose objectiveness when starting to invest own money based on my EWcounts... (And then you might know the rest of the story ;-) )

    btw. I've created a handy tool for plotting fibonacci retracements when browsing the internet. It's open source and free to download. Available only for Firefox currently (too lazy to make it available for Chrome)

    1. Thanks. I just let the EWO, and The Eight Fold Path method, have a big say in what is going on.

  3. Thanks Joe. You are THE BEST!

  4. ET, in your experience, does the EWO generally peak in wave 1 of a diagonal? Thank you for the objective analysis.

    1. Good question. Yes, usually. A key difference from an impulse.

  5. Thanks Joe for the wonderful analysis. I have been following this count for a while and it fits very well with SPX, RUT. But with COMP/NQ, Nasdaq it doesn't look compatible. That to me seems like telling it wants to rip higher.

  6. Thanks joe for the answer

    If the wave 5 V ends around March 2017, so after we go back in a bear market fall style of the sp 500 to 600 points ????

  7. You have told in your earlier blog " Prechter's guidelines say that minor Wave 1 of a diagonal should crest above that prior Intermediate wave (3), "in order to shows its motive character." Prechter has not followed his own guidelines for marking ED in DOW.
    In case of an impulse for a 5th wave, the failed truncated fifth is seen often after an unusually strong wave 3 thrust. In this case, it fails to meet or exceed the end of wave 3.
    What happens in case of failed ED?
    Is it possible that the minor 1 and even minor 3 of the ending diagonal does not rise above the prior intermediate wave 3?