Sunday, July 9, 2017

Hot Topic -- Hot Topic: Move ES Wave Counting to 4-Hr Chart

Outlook: Whippy Triangle Still Possible Followed by exit to the downside

On Wednesday, in our blog post entitled, One Possible Interpretation, we had noted the possibility of a triangle downward in the SP500 Index. And, because of the sharpness of the triangle, we specifically said, "And it is entirely possible, the triangle could even expand a bit if it wants."

Then, on Thursday we gave a specific level for a "wave counting stop" at 2424 on the S&P500 Index, as far as the downward count goes. It appeared in the SP500 15-minute cash chart. And that level was indeed hit on Friday, which put the larger down count temporarily on hold.

Because since there was some support found at the 50-day moving average, and a new price low was not made in the process, the hypothesis of an triangle which is pushing out it's boundaries a bit now seems entirely plausible. Here is the chart of the ES E-Mini S&P500 Index Futures - on a four hour time frame. I highly recommend that - until further notice - this time frame be used for counting waves.

ES E-Mini S&P500 Futures -  4 HR

The waves of the triangle are the five waves, (a), (b), (c), (d), (e) if they form properly. Please have a look at the time signature within the possible larger triangle. Each of the waves is currently becoming longer in time. Wave (a) is 16 candles, wave (b) is 18 candles, and wave (c), so far, is more than 34 candles.

Furthermore, there is relatively little economic news in the beginning part of the week which could result in range-bound whippy trading until Chair Yellen begins her testimony before Congress on Wednesday. It does not end until Thursday.

Waves (d) and (e) do not have to take more candles than (c). The only requirement here is that if a triangle forms properly, that waves (c) and (e) cross up and over the downward a wave from 21 Jun. If you look at where the 18-day SMA is on the daily chart, you will probably note the same thing that Ira Epstein might. "The battle is being fought at the 18-day SMA - the line in the sand".

For this chart, both of the blue b waves are hard wave invalidation points

Have a good beginning to your week as it might be good to hear what Chair Yellen has to say.


  1. Joe, is there any way to post a top-level link to the latest chart overviews, like the 3 day chart you just posted for the Russel 2000? If there were a link at the top of your post listings for S&P etc, then opening that in a new tab would make it easier to orient myself as to where we are and what could be expected next.
    ...And THANKS again. Your explanations are so helpful to me as I begin to learn this! I only just started looking into the markets 6 months ago when I realized the advisor I was paying a (guaranteed) 2.5%, only managed to average a 1.7% since 2010 (of course they lost the requisite huge amounts in 08 and 00). A couple of poor choices on their part made me realize that the "we're properly diversified" line didn't hole water when they put all my eggs into one active manager basket. As I don't have a lot, and will have very little ss, I decided my goal is more to not loose than to try and snag the last gasp up. I set out on my own figuring it wouldn't be too hard to at least match that 1.7% given their 2.5% handicap and a bull market. (Which has been true so far :) ). It is rather scary, starting from knowing nothing at all. Scouring the web led me to Elliott waves, among other things, and then to your site. All that to say that I REALLY appreciate the time you take to explain your reasoning!
    Speaking of reasons, may I ask how the "downward a wave from Jun 21" became the testing point for the triangle possibility?

    1. hi eyes .. right now Google Blogger allows only one highlighted post, and I am using that to highlight The Eight-Fold Path Method. The reason I made this week's video (see Saturday post) was to orient all to the Stock Market and Crude counts. See that video for the bigger picture. As to the triangle testing point, that 'a' wave down is very slippery. It 'can' be counted as a :5 or a :3. If it's a :5, then we might have the potential triangle. If it's a :3, then we might have the downward diagonal, and I will post on this when the waves become just a bit clearer.