Thursday, January 5, 2017

Still Wedging

While everything remains on track for the daily count - meaning we are still expecting the minor 5th wave higher to make a new all time high in the DOW and S&P - yesterday I noted in this blog that the intra-day wave shape was wedging and applied alternate labels of a, b, c to the rising wave. In fact, today, I have altogether abandoned impulse labels up for minor 5.

Below is the count that was presented, and actually counted wave-for-wave in the real time chat room this morning, including the truncation of the vth wave of (c) of z of 4 - which was called a very real potential on Friday - and made me conclude the down turn was likely over.

SP500 15-Minute Chart - Likely Ending Diagonal in Minor 5

I have abandoned the impulse labels because of the overlap of Y of iv with the B wave up (circle B) of the compound flat correction for the blue (b) wave down that was initially called the end of wave ii in a now defunct impulse count.

I do not think a "longer" fourth wave (i.e. longer Minor 4) is occurring as some have suggested because the count to Minor 4 was w-x-y-x-z; and that count is always terminal. It ended at the proper moment, and the z wave, which is prone to show truncation, did, in fact, truncate. You can't ask for more perfection from the wave principle than that.

So, if a diagonal occurs properly, it will "likely" terminate Minor 5 upward, but it could take days of "grinding", yet. That's fine with me. Still a diagonal must occur with very specific rules and so we will keep you posted should something not work out correctly.

Cheers and enjoy the chart.
TraderJoe

12 comments:

  1. Thanks TJ. Appoligies for some of my earlier posts that were quite rude. There was no need for it. You do explain EW very well and I have to admit it is starting to make a lot more sense.

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    1. That's the spirit. Keep up your learning.

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  2. How do I access your real time chat room?
    Thank you

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    1. Due to crawling web-bots, instead of giving you a direct email link, you must go to my website which is study-of-cycles.com (minus the dashes), click on the "Contacts" page, and send an email to that address for the information. Sorry, but the spammers have made it necessary to make it more painful than it needs to be.

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    2. just tried to email...received following message:

      "Sorry, we were unable to deliver your message to the following address. xxxxxxx_xxxxxx@xxxxx.com

      this user doesn't have a xxxxx.com account"

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  3. Thank you Joe for your analysis. The z wave truncation caused me to miss an entry as I was waiting for one more low. The market gaped up the next day and am kicking myself for not getting in. You mentioned that z waves are prone to truncation which I wasn't aware of. This along with some other concepts you have mentioned such as the triangle rules and the fact that ending diagonals can truncate but leading diagonals can't are foreign to me and I can't find them in my Frost and Prechter book. My book is rather old, do I need a newer version or are these concepts derived somewhere else?

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    1. PT.. you need to get a new copy of Frost & Prechter. They are in their 10th Edition. Page 88 clearly states as a 'rule' (not a guideline) that "in a leading diagonal wave 5 always ends beyond the end of wave 3". That means 'they can not fail'.

      And, regarding the Z wave truncation, page 89 states in the section on zigzags that "Wave C almost always ends beyond the end of wave A". That means there are sometimes when the C wave truncates. By extension, the Z wave is just the most extreme case of the C wave truncation.

      Tom, I'm trying to convince people here not to rely on their "old knowledge" of Elliott Wave or their once reading of Frost & Prechter or Glenn Neely's, "Mastering Elliott Wave". There are a lot of things to remember and synthesize. The triangle timing rules are displayed in Neely's book. There is a lot more which Bill Williams adds to the picture. The new hedge fund managers and quants who 'do this for their living and their survival' know all this stuff cold, and even have some or all it programmed into their trading computers and algorithms. That's who the competition is. Keep them in mind as an impetus to improve.

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  4. So it looks like the minute 1 leading diagonal has ended. Do the Fib tendencies for the wave 2 retrace differ from the tendencies for the retrace of an impulse?

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    1. If I'm not mistaken minor 4 ended on 12-30 around 2233. The subsequent move up is minute 1 of minor 5 making it a leading diagonal.

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    2. Correct about minor 4, but he's depicting an ED for minor 5. All you need to do is review caption underneath the chart.

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