Wednesday, March 1, 2017

Chart from Video - Updated

Here is the chart from last weekend's video, updated for your reference.

Dow Jones Industrial Average Two-Day Chart

Within wave Minor C, wave minute ((iii)) is longer than wave minute ((i)), so technically, wave minute ((v)) of Minor C can be as long as it wishes. My video had a target of 21,374 and change, and today we are over 21,100. If tomorrow we get a slightly higher high, then minuet (iii) can be counted as completed.

The best alternate is that Minor B ended at the election low, as shown in blue with a question mark. But, the Dow and the S&P synchronize better this way at the end of minute ((iv)) in the main count. And, further, it agrees with a third wave on a peak of the EWO.

Minor C would end Intermediate Wave (1) of a diagonal wave in the Dow. Then there would be four more Intermediate waves (2), (3), (4), and (5) required in an overlapping diagonal sequence for Primary V.

Although today's point increase was impressive, the advance - decline line was a fairly tepid 2:1, as opposed to some 4:1, 6:1  or even 9:1 days inside of more prominent impulses. And, today was the first day of the new month with the usual inflows from pension funds, 401k's, dividend reinvestment plans, etc. as I have often mentioned in this blog before.

For now, stay flexible and patient with regard to wave counting. If you are wondering how this relates to trading, then see my paraphrase of Ira Epstein's Guidelines for trading at this LINK. They are my best effort to summarize what Ira Epstein teaches. I do not offer trading or investment advice.

From that perspective, prices have hit their daily upper Bollinger Band target today, and are still above the 18-day "line in the sand", with the daily slow stochastic fully embedded. And so, there is still a positive bias to prices. There has not yet been an outside reversal candle down - or anything like it - yet! But Ira teaches, one does not buy "new long" positions at the upper Bollinger Band, because that is where the so-called 'Smart Money" is likely taking profits, and there is only about a 5% chance of being outside of the Bollinger Bands on any given day.

Neither, he teaches does one "sell short" at the upper Bollinger Band for three reasons. The first reason is, "There is a big difference between selling to take profits, or selling a portion to take profits, versus selling short outright." There is no reason price can not continue to "ride the band" with the slow stochastic fully embedded. The second reason is that price is not below the 18-day SMA, the line in the sand, and so prices do not yet have a downside bias. And third, there is no "swingline" series of lower lows and lower highs to indicate a down trend on the daily chart of the ES futures.

Here is the daily chart of the March, 2017 ES E-Mini S&P Futures so you can reference it, relative to the above.

ES E-Mini S&P 500 March Futures - Daily

Note price hit the upper Bollinger Band, is above the 18-day SMA, has a fully embedded slow stochastic over 80, and, has no swing line sequence of lower lows and lower highs.

I will simply say it is Ira's advice that gives me the patience to be a bit flexible with wave counting.

Best wishes for your success.
TraderJoe



10 comments:

  1. Thanks Joe. Whatever happened to your ES contracting ending diagonal count that you said ended minute wave ((iii)) of Minor Wave 3? I'm referring back to your post from 2/25. Since there was no retracement of any sort, I'm assuming that you have changed that count. Would appreciate it if you could update it for us. Thanks again.

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    1. I replied earlier that since there was a non-overlapping "five waves up" in cash to the same location, it greatly reduced the imperative for a full retrace. In other words, futures made a diagonal, but cash did not. So, only an "interim" wave top was created.

      The full retrace did not happen but three waves down in a zigzag, started a correction that ended yesterday. And an impulse out of the correction occurred today.

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    2. Thanks for the explanation, Joe. So, what I have learned in this instance is that ES has to be given flexibility. That makes sense considering that much of the chart represents extremely low volume trading.

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    3. Joe, just to clarify, are you saying that after the end of minute wave ((iii))there was a 4th wave triangle that ended at SPX 2360, just before the close on 2/28? Thanks.

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    4. Yes. I will post that chart tonight.

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  2. So if I understand . . .we are in the c wave of wave 1 of an Ending Diagonal?

    Can't say enough good about what you are doing. . . with all the marketing and no substance out there . . your blog is the exact opposite.

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    1. That's correct, and thanks for the fine comment, Mark.

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  3. Not to mention wave 1 of ED would have taken a fib 13 months to complete assuming it finishes in the next 1-3 weeks.

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