Tuesday, August 8, 2017

Thrust out of Triangle And Outside Reversal Day Likely Completes Pattern

Market Outlook: 90% Probability that Minor 3 Top has Occurred
Market Indexes: All major U.S. Indexes lower

Far in advance of today, in the weekend video, I showed this count of the ES E-Mini S&P500 Index futures. Since publishing it, my stance has been cautious. Here is that chart.

Es E-Mini S&P Futures - 2 Day Chart - From Weekend Video

No one I know of on the web has shown you such a detailed picture of price movement with a clear and documented reference from a published Elliott Wave analyst right along side it. As far as we can tell, the wedge in this configuration just clearly ran out of time.

Further, in previous clear blog posts I suggested we were in a triangle, and that the triangle had likely completed. Today's new high was likely the thrust out of the triangle. During the live chat room, the triangle was modified to show a barrier triangle - and one quick five-wave thrust out of it.

That modification is shown below on the hourly S&P Chart.

SP500 Cash - Hourly - Barrier Triangle

Trading below the (e) wave of the triangle, and below all of yesterday's price action likely indicates the reversal. Today was a throw-over the wedge, then reversal, and the reversal is of significant concern.

You'll note that I stated there is a 90% chance that the wave count for Minor 3 is completed right here. I will up that to 98% once the E-Mini S&P500 Futures overlap wave wave (iii) at the 2450 level. I am actively looking for other alternates. I see one. I has to do with the fact that Neely shows that the wedge trend lines do not have to be connected to the origin or zero point. But, I will not be discussing that one until / unless higher highs are made.

Today's losses supposedly occurred on saber-rattling between North Korea, and the U.S. If only it were sabers!  Stay safe. Be good, and be flexible for the time being. We hope to be able to show some price confirmations, soon!

Have a good start to the evening!


  1. Thanks for your clearly documented projections.

  2. Thanks for your clear an well presented posts.
    Referring back to the DOW count you posted some days ago, todays high seems to fit with the mentioned 1.618 extension.

    As you stated that in the first option you expect a wave iv to retract to the area of 20600, you did not give a target for the case we just made wave (1).
    Where would you then expect a wave (2) to end? I assume wave (2) in the diagonal case would be more shallow then a (iv) in the impulsive case?

    In both cases whoever entered a short today and has a stop over the high of the day seems in a quite good position.

    Thanks again and keep up the great work!

    Best regards

    1. Hi Mark. Thanks for the fine comments. As I have stated previously, the diagonal case requires a lot more in the way of overlap confirmations than we have right now. That being said, in May, 2015, wave (2) was only a 40% retrace: not the 62 - 78% some people expect. I'll keep watching, but I think it puts the cart before the horse right now.


    2. Appreciate your answer, Joe!
      Makes sense!

  3. I am more hopeful than all summer on this count.

  4. Thanks Joe.Great charts but not sure how you get 90% probability we topped?

    1. There are several factors an Elliott analyst looks for: 1) an ending pattern like a diagonal or a triangle, (in this case the latter) check; 2) a triangle with extremely low volume at the end of it, check; 3) a thrust out of a triangle or a throw-over of a diagonal (in this case the former), check; 4) outside reversal day, check; 5) a key reversal day, check; 5) trading below the (e) wave of a triangle, check, 6) trading below the 18-day SMA, check, 7) hitting the lower daily Bollinger band, check, 8) key Fibonacci relationships satisfied, check. 9) A completed Elliott Wave count, check.

      All those boxes are checked. The only items unchecked are key price overlaps.

    2. Thanks for the detailed reply.

  5. Great presentation and explanation, Joe. Other things I'll point out is that while the DOW was making new all time highs every day for the past 2 weeks (on the strength of just 3 stocks,) 11 out of the last 14 days in SPX were red candles. Of the 3 green candles, only one was an actual up day, and that day had the lowest volume in almost 20 years, and the cumulative 10 day volume in SPX was the lowest in 52 years. All of that spells major league distribution. Still though, as of now, the possibility still remains that the move from 2460 to 2490 was a B wave.

  6. Joe, Thank you for your reply with such a concise (yet comprehensive) checklist. It was very helpful.