Wednesday, January 11, 2017

Lower Low

Although we got a lower low today, and are glad we indicated a top of sorts where we did, some additional studies have indicated we may have more topping to do yet. First, let's look at that SP500 30-minute chart again.

SP500 30-Minutes Lower Low Today

Although we did get a lower low today, the downward wave does not count well according to The Eight Fold Path Methodology. So, during live chat today, we indicated that there were two ways to count the down wave in progress: as A-B-C or as a-b-c-x-a-b-c; which the latter you will recognize as W-X-Y, and is shown on the above chart. We also pointed out that the down wave stopped at the prior wave iv in the diagonal. This suggests - as best we can tell right now - that only an overall "B" wave was formed lower, and the diagonal was just the "A" wave of minute i in a larger upward diagonal count that will make up Minor wave 5. So, there 'should' at some point be a C wave higher to end minute i.

Supporting this view; today I examined the Dow Jones Industrial Average, as below. And, two interesting things show up in the Dow. First, when trying to count a diagonal upward, one finds that the middle wave (marked at the end of the day on January 5th) is "too short". This means the Dow must not have been in a diagonal, but in a triangle.

DJIA - 15 Minute - Not a Diagonal But a Triangle

Also, you will note that, unlike the S&P 500 which did not, the Dow did make a new secondary low today. This prevents a count of  i, ii up from the first low. Therefore, it appears as if wave c in the Dow count is the complex leg of a triangle, and higher highs might, in fact, be expected within this Minor 5th wave. First, the d & e legs of a triangle must finish properly, with the e leg crossing back down over the A wave. Then, there should be up movement out of the triangle.

This would allow the minor 5th wave to take on some length in relationship to it's minor wave 3, and that would be acceptable - provided that minor 5 does not become longer than minor 3.

10 comments:

  1. Joe, Thank you very much for sharing your knowledge & updates. Have a good night.

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  2. Thanks again Joe for your most interesting work. I was also counting a WXY so I'm heartened that I was on the right track.
    I do have one observation and question. If in fact on the SPX the WXY is all of B then we are in C up. At the same time the Dow needs just a little more up in d of the triangle and then must turn down for e. It would be an odd situation for the SPX to be going up and the Dow to be going down. I can think of two scenario's to accommodate this.
    1. The Dow makes its e wave down while the SPX is making 2 down of C.
    2. The SPX B wave gets more complex and becomes WXYXZ.
    Am I on the right track with this thinking?

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    Replies
    1. Yes. Provided w-x-y-x-z doesn't turn into a diagonal lower. See with the downward wave stopping at the prior iv, it either stops here or it doesn't.

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  3. Joe, with your count it looks like minor 5 could still fall under 20k in the Dow. Is this correct?

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    Replies
    1. No. A typical thrust out of the triangle would take it up over 20k.

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  4. Joe- Caldaro not only banning you and I from his precious blog. just banned Gary Leibovitz for bad-mouthing Trump.

    When I first started there he was all 'Namaste' and 'pro-Obama' and as his waves counts flipped and flopped he got more angry in his politics too.

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    Replies
    1. FOH .. Caldaro did not ban me. I voluntarily did not reapply under his new supposed guidelines because it was clear he did not want an open & honest challenge of his methods.

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    2. Basically unless you just praise him , he cannot handle any dissent or questioning of his count. Suggest a very fragile ego.

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    3. Does it really matter? While Caldaro offers some interesting info from time to time, the comments section of that blog is amateur hour at best. There is nothing in that comments section that comes close to the professional analysis and meticulous process that Joe presents here.

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  5. If the down move from 2282 turns out to be an expanding LD: Does anyone know how i might short Dow 20,000 party hats?

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