Tuesday, April 18, 2017

Count Continues - 5

The ES E-Mini S&P500 futures made a slight higher high in the overnight session, then traded lower before the cash market opened. So far, prices along the right hand side of the chart below continue to grind lower.

ES E-Mini S&P 500 Futures - 4 HR
The whippy price action continued into today, as prices followed down along the most recent internal diagonal trend line.

The half-hourly S&P500 cash index chart looks like "Swiss cheese" at the moment, with numerous gaps (shown in red) both above and below the market.

S&P500 Cash Index - 30 Minutes - Numerous Gaps

The cash index could not close it's opening gap today, and so a series of lower highs remains clear, but what is still needed is lower lows.

It's a time to remain flexible and patient to see whether the downward count resolves properly with a low below ES 2504 (futures) or an upward count begins. Another downward gap tomorrow should be taken as a sign the downward count may indeed resolve properly, as today can be counted as ((1)) down, as the first SP500 30-min candle downward, with a flat ((2)) upward. Invalidation of that downward impulse count would be over the 2350 level on the cash S&P. The diagonal would have to be examined in real time.

Other evidence that may be pointing in the downward direction is that the DJIA has greater than a 90% retrace on it's March 27th down wave. That would be very atypical of a triangle retrace - which is usually about 78.6% or less. So, at this time the down count still has priority. Is it possible this whole last wave will resolve as a larger diagonal lower? Yes, it is. But, an impulse lower is still quite possible too. Let's see how it goes.

Have a great evening.


  1. Thank you Joe, your count takes force while the triangle loses the forms.

    Some time cycles point at April, 28 for a bottom. Is it compatible with your forecast?

    1. Nothing wrong with April 28th for a low. Please share which cycles you see bottoming then.

    2. It is a proprietary study, based in gann/astro. I cannot give details, it is not my work and it is copyrighted. Other based on lunar cycles and seasonality coincides with the same date for a low. I simply compare this type of forecasts with the price action.

  2. Joe, is it possible that we have a running triangle that will break out to the upside? The wave you marked as (iii) would be A, (iv) would be B and so on. But (iii) in your count is made of 3 waves, but I would need to count it as 5 waves. In many situations, that is the conundrum that I am facing. How do you count something as 3 or 5 waves?

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