Tuesday, March 21, 2017

Critical Juncture

In the live chat room over the last several weeks, I have been posting this chart of the Russell 2000.

Russell 2000 - 2 Daily - Completed Minor A, B, C

If you study this wave from an Elliott Wave perspective, you'll see that it is easy to count five non-overlapping waves up to the Minor A wave high in September 2016 with a good pattern of alternation to the waves. This is followed by a B wave to the election low, and, now a completed Minor C wave up to an Intermediate (1) wave at the high, as an ending contracting diagonal which has really excellent form.

This can be the first wave of an ending diagonal wave in the Russell as the Advance / Decline line now begins to diverge from the averages, and the Russell leads the way down.

And, there is now a similar potential in the Dow Jones Industrial Average as in the chart below.

Dow Jones Industrial Average - 2 Daily - Completed Minor A, B, C

This is one of the few ways that we can count the Dow, and still maintain a pattern of alternation in the C wave, up. This is the same chart as was published in my prior video - although we were looking for the end of the C wave, then. The Dow did make it over 21,039, and appears to be stopping short of that C = 1.618 x A wave.

It is already possible to conclude that minute ((v)) of Minor C is over. There is one possibility for a fourth wave in this area, but the problem is it is difficult to find a further pattern of alternation in minute ((v)). The only way this would be possible would be if minuet (iv) within minute ((v)) became a much longer triangle in time, but, we have already had a triangle for the minute ((iv)) wave. So, I have no confidence that will happen yet.

I will be patient for a few more points but is it should be apparent to even an untrained eye that the first risk could be down to a trend line drawn between waves 0 - B and ((ii)). Being patient does not mean I am looking for further upside. It means the market must now disprove the hypothesis that the Russell 2000 has made an ending contracting diagonal at the highs. It has the potential to travel back below it's B wave - which is the start of the diagonal.

From the standpoint of The Eight Fold Path, the high of the EWO on the SP500 2-hr chart was 30-1, and we said, as a fourth wave, the EWO should not travel below -12 which is where is it right now. This would seem to indicate that below prices of 2335, and / or lower, the The Eight Fold Path Method would indicate we are not following the guidelines for an impulsive wave, and it will have done it's job here too. So, one possible chance for a stick-save, but I certainly am not waiting with bated breath.

Have a good evening, and be careful.
TraderJoe






4 comments:

  1. Hi Joe,
    "This would seem to indicate that below prices of 2335, and / or lower, the The Eight Fold Path Method would indicate we are not following the guidelines for an impulsive wave, and it will have done it's job here too."

    what lvl in SPX you think we may confirm the juncture of C complete with no alteration of minute iv coming.is it 2335 ?

    As per your post what is critical juncture ? one is exceeding 2400 and is the other 2335 ?

    ReplyDelete
  2. In general, from here forward, comments are responded to only if you select a name or handle so that it is clear who is being responded to. There could be several people with 'Unknown'. And, yes.

    ReplyDelete
  3. Hi Joe,
    I think was logged out from google while posting.

    ReplyDelete