Friday, January 6, 2017

No Cee-Gar

While we got the new all time highs today, with the S&P over it's previous 2277 high, the Dow Jones Industrial Average missed it's 20,000 mark by the slimmest of margins. Still the count continues to wedge, and frustrate the vast majority with lack of follow-through and some waves seemingly deeper than they should be. Trend lines break and then they re-establish themselves. This is the market trying to tell you something, (hint: I'm wheezing momentum).

The NYSE advance-decline line was actually negative on today's close. After being positive territory all day long the ratio at the bell was 1,426 (adv) to 1,584 (dec). While not a disaster, it really doesn't speak of party hats!

Here is a look at the chart as it was being published in the live chat room all day today.

SP500 15-Minute Wave Minute i (Circle i) of Minor 5


The chart would indicate that if wave micro-2 (circle-2) is a flat, then wave micro 4 (circle-4) is a zigzag which hasn't by any means overlapped wave micro-1 (circle-1), yet, and this provides excellent alternation within this vth wave of the (c) wave up of minute i (circle-i). So, one more up wave - and potentially one higher high - should do it before starting on minute-ii (circle-ii) in the downward direction. Assuming that occurs, we think the five minute waves up, counted as (circle i, ii, iii, iv, v), when & IF they form properly, is overall a contracting ending diagonal for the end of minor 5 of Intermediate (3) per the count in the weekend video.

How far can minute-ii (circle-ii) go lower? As far as it wants provided it does not trade below the minor 4th wave at 2234. What shape should minute-ii (circle-ii) have? Well, it should be a zigzag. (Remember in a zigzag, the 'b' wave can still be a flat or a running triangle.)  It would not be uncommon to see a 62 - 87% retrace, but just filling either of the two clear gaps on the chart could do it too. The supposed "deep retrace" for the internal legs is a guideline only!

Again .. assuming the higher high occurs.

If the higher high does not occur, the best alternate is that today completed a Leading Diagonal first wave - because we were able to count one of those earlier today on the NQ chart. Either way, a second wave down (or more) is likely looking at us right in the face.

But .. let's at least give the party hat guys a chance!

Until then, remember wave micro-4 (circle 4) would invalidate if it overlaps wave micro-1 (circle-1) before a new all time high is made in the market.

Why do we think the up wave has a little farther to go in terms of completing an ending diagonal? Because it should 'try' to establish a Fibonacci ratio with it's Minor 3 wave counterpart. But all of that is in the future.

Have a nice weekend.
Trader Joe


23 comments:

  1. hi Joe,
    what your count on dxy and gold now?

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    1. Sorry, but I think you are expecting a little too much for free. Please see the weekend video in the New Year's blog.

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    2. Ok sir... would like to subscribe to your paid subscription blog... whenever you start.

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    3. My aim is not to publish a subscription service at this time. My aim is to show you that using The Eight Fold Path Method which I have fully disclosed you can count Elliott Wave Impulses for yourself. You don't need anyone's help, and you will not build confidence in Elliott Wave or in your own abilities to use it if you don't practice. If you always have it done for you, you will not truly learn how it works. I am counting the advance above as a diagonal, not out of 'preference' or subjective judgement, but because it does not conform to The Eight Fold Path Methodology.

      Try it. Make mistakes. Learn.

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  2. Thanks Joe. I like to read both this blog and OEW but I noticed you potentially have us in minor 5 while OEW has us in minute 5. I think this is probably why I always struggled with EW theory. It's very open to interpretation.

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    1. OEW does not use the official EW label degrees. It has capriciously introduced the 'major' degree of wave label in place of the Intermediate degree, and uses the Intermediate degree for other things. Therefore, one outcome is certain: OEW will 'never' agree with an Elliott Wave count - a good way to sell a tutorial course supposedly selling the keys to unlocking the mysteries of the universe for an exorbitant price.

      As I have documented, OEW has never been correct at the three recent significant turns in U.S. equities, and they will likely be incorrect again.

      The official Elliott Wave degree labels are not only published in Prechter and in Neely, but they are also published on Stockcharts.com, and any other degree labels are rubbish and misleading to the public.

      So, you see. The issue is that it's 'not' very open to interpretation. OEW has done something completely self-serving, and there is no other reputable Elliott analyst that will use the 'major' degree of wave label. That's why the OEW analysis is not reputable.

      Hope this helps, and I hope you are 'really' listening this time through.

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    2. thanks Joe for the update. On oil do you see a possibility of running flat from dec 12 to early January and then we may be in a LD of the next move up...(which will be 3rd of C--- 42 to 54 was the first wave of C). This plays with OPEC implementing their cut starting this month.

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    3. Welcome, Jack. Keep in mind that expanded flats are more common than running flats. While I am in the flat camp, the downward wave may not be done yet. In the real time chat room, I called the weak possibility of the leading diagonal you are seeing, but stated it was less likely because the down waves do not count well as zigzags even though the up legs do. So, it may just be a second wave up as w-x-y-x-? because a higher high for the z wave has not been made yet.

      Hope this helps.

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    4. Thanks Joe. Appriecate the reply.

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  3. For Steve Walker:
    Good morning Steve. I wanted to continue our thread from the previous post. As I see things, we are both potentially correct at this point since the true pattern off of the z wave low is yet undetermined. I call it the prune problem. Joe has his 4th wave conundrum and I have my prune problem. (grin) There used to be a laxative commercial that started out saying," the problem with prunes is are 3 enough, are 6 too many?" Well the prune provlem with EW is, "is it a 3 or is it a 5"
    So, if the action off of the z wave low is a three as Joe seems to think it is, then we have a minute wave 1 of an ED minor 5 which is what you were referring to. If the action off of the z wave low is a 5 then we have a leading diagonal minute 1 of a potential impulsive minor 5 which is what I was referring to.
    Cheers
    Tom

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    1. Good afternoon PT! I completely understand what you are saying! However, TJ specifically states it's not following the 8 path method for counting an impulse so why would he consider a LD at this point?

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    2. Well Steve, Joe hadn't made that statement yet at the time we started our conversation. Second, I believe Joe is referring to the leg up from the z wave low. It isn't impulsive in itself, diagonals aren't impulsive and don't conform to the eight fold path. However, a leading diagonal on a minute level which is not following the path in and of itself doesn't disqualify an impulse on the minor level, or disqualify the minor level from following the eight fold path.

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    3. PS: Joe mentions the LD as the alternate if we head down on Monday morning. Don't get me wrong I'm not locked into this view. Just keeping an open mind.

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    4. I get it. not sure how the discussion came this far when I simply stated on the last update TJ was only speaking of an ED when you stated LD. This was my only point. Either outcome does not affect me in any way.

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    5. Well Steve, our conversation caused me to keep looking deeper and gain more clarity, so I'm grateful for the dialog and your views.
      Happy to hear your comments anytime.

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  4. Joe,
    I've read this post multiple times and two things peak my curiosity.
    1. We are looking at a second wave down or more. Can you shed some light on the "or more"?
    2. You mention a fib relationship between minor 5 and 3. I thought the relationship was between 5 and 1?

    Thanks again for you work
    Tom

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    Replies
    1. Yes. Unfortunately, a new series of measurements conducted in the weekend off hours shows a Contracting Ending Diagonal 'could' have already been formed by these waves since the 12/31 bottom; (i) = 2264, (ii) = 2246, (iii) = 2273, (iv) = 2260, (v) = 2282. It has all of the right measurements.

      But while all of the up waves 'may' be counted as zigzags, the down wave to wave (ii) does not look or count like a fully formed zigzag - only a truncated one with a very short 'c' wave. If that's how it turns out, so be it. But it is not my preference at this point - because of the ugly zigzag for (ii), and the fact that the NQ looks like it really needs another wave up too.

      So, that's why I said, "or more .. " but it does not appear to be the best wave choice at this point. So I do expect another wave up.

      As regards a fib relationship between minor 5 and minor 3, you must have missed the whole discussion of a wedge forming because the first wave, Minor 1, is the extended wave in the sequence. When that happens, and there is a shallow second wave, then wave 3 tends form at the 0.618 extension of wave 1 - which it did and I commented on it. Then, because wave 3 is shorter than 1, wave 5 must be shorter than 3, and it makes it's Fib relationship with regard to 3, not with 1 - as in an impulse where wave 3 is the extended wave. So, in this case Wave 5 could equal 0.618 x 3, or 0.50 x 3 or 0.382 x 3.

      Hope this helps, but please try to follow the blog in detail because repeating the information gets old quickly.

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  5. Thank you for all your help Joe. Will try investing.com for charting.

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  6. Joe, I just wanted to thank you for posting these articles on your blog...your explanations and methods of describing a very complex analysis to some is superb..I've learned more from your articles and Youtube uploads than I have in a long time..many thanks and Happy New Year to you

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    1. Thanks Fibro. Much appreciated and glad you are learning.

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  7. Hi joe bravo for your work
    In weekly and monthly the last wave v can last how long according to you?

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  8. Joe, for wave circle 4 to be complete doesn't the EWO have to approach within 10% of the 0 line?

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    1. Not on the time-frame you see above because (a), (b), (c) is not an impulse. You have to drop down a time frame to see that for circle 4 of (c), and count only the (c) wave with 120 - 160 candles.

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