Thursday, April 20, 2017

Count Modified

First, here is the eight hour version of the ES E-Mini S&P Futures chart that I said I would publish today to reduce the number of candles. I said I would not change the count without informing you.  Now I am informing you. The count was revised slightly during live trading today because of the large price movement.

ES E-Mini S&P 500 8-HR Potential Diagonal Lower

Yesterday's lower daily low in the DJIA is where the new b wave of minuet (iv) is in the ES chart, above.

Today was likely the c wave higher. I called for a possible truncation in the fifth wave of the c wave in real time, and it may have done that, but tomorrow is needed to clarify whether a truncation occurred for certain. The advantage of another up wave today was that it made wave minuet (iv) larger in time that wave minuet (ii), something we discussed in the live chat room. That is the most common form of the expanding diagonal, that the fourth wave takes more time than the second wave. Note than minute ((iv)) also currently takes more time than minute ((ii)) in the above chart.

In order for both diagonals to complete properly, the futures price should still trade below 2304, as shown by the 100% line on the chart. Any higher high above 2363.25 (futures) will invalidate the interior wave (v) diagonal because in an expanding diagonal, wave (iv) can not travel beyond the end of wave (ii). And now, anything over 2375 (futures) will invalidate the downward diagonal as a whole.

So, I was considering that lower daily low for the DOW yesterday, and I had a thought that might wind up synchronizing the DOW and the S&P in time at the lows again. I presented the idea during live chat, and will also present it here. It is based on the question, "just why did the DOW have a marginal lower  low yesterday?"

DJIA - Two Hour Bars - Potential Contracting Diagonal

I can't say for sure but wave minute ((iii)) is a marginal new low, and wave minute ((iv)) currently takes less time than minute wave ((ii)) - as is usual for a contracting diagonal. I do not know that minute ((iv)) is over yet. Invalidation of a contracting diagonal in the DOW is above minute wave ((ii)).

Before the down wave is over, we might expect to see a triangle in the last wave - particularly of the expanding diagonal S&P500.

Well, that's enough for now, and remain flexible and patient as the whipsaws are likely to continue while the waves clearly do not follow The Eight Fold Path guidelines, meaning they are clearly not impulses.

Have a good night.
TraderJoe




6 comments:

  1. Thanks Joe. I'm still favoring the count down from the top as a 1-2-i-ii, which, if correct, should have completed today (although one more small wave up that exceeds today's high is allowed.) My wave 1 is in the same place as your circle 1. Wave 2 is in the same place as your circle 4. Wave i is the initial straight line move down from your circle 4, and wave ii completed today. When you look at the chart this way, you'll see that i-ii is a mirror image of 1-2, only smaller in both price and time. Both have running wave 2s. As a side note, in SPX, today's wave c rally was an exact .618 extension of Monday's wave a rally. In the DOW, today's rally completed an expanded flat from Monday morning, which allowed the DOW and SPX to get back in sync. Of course, if this count is correct, then the market needs to start accelerating straight down almost immediately.

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    1. Welcome. So far, in the SP500 there is no firm evidence for that count - such as even a minor lower low beyond minute ((iii)) in the SP500. Further, both "running wave 2's" would be w-x-y which lowers the probability due to the rarity of that type of formation. Oh, yes, it's valid, but quite rare.

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    2. I can also count from the 4/5 high to the 4/13 low as a LD wave i, followed by this week's .618 retracement as wave ii. The end result is the same. (assuming the market cooperates.)

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  2. I think the count is in 3 degrees of a minute B (b of b of B) of minor 4. B waves are impossible to trade in one degree let alone 3. What does this all mean? It would not shock me to hit 2365-2370 tomorrow and then head below 2322 to complete b of B sometime next week 2305-2315). c of B would need to hit 2393 minimum for a flat.

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    1. Hi. That doesn't seem correct because the middle b wave then should at least be a 90% wave; and there is no evidence of that type I can see.

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    2. Minute A = 2322
      minuette a = 2378
      subminuette a = 2329
      subminuette b = 2365-2370
      minuette b = 2305-2315
      Minute B = 2393 minimum (90% of 2401-2322)
      Minute C = 2300ish to complete Minor 4

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