Market Indexes: SP500, DJIA new All Time Highs
Today's Candle: Higher High, Higher Low, Higher Close
Yesterday, we stated we were likely making the last several wave of five waves up within ((C)) of the z wave of a triple zigzag. Today, in a rare special treat, I will provide the chart that was done "live and in real time" in the chat room. Five waves up; wave for wave, on the five-minute chart of the cash S&P500 Index in a contracting diagonal.
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| S&P500 Cash Index - 5 Minute Chart |
There it is, and unmistakable. Wave (v) is shorter than wave (iii), wave (iii) is shorter than wave (i), wave (iv) is shorter than wave (ii) and overlaps wave (i), and each of the waves can be clearly counted in a zigzag.
Wave (ii) had just over a 68% retrace. Wave (iv) had a 50% retrace. The proportions and trend lines are near perfection. The S&P500 Index hit 2,500, and had a slight characteristic throw-over of the upper trend line.
The pattern is there. There is nothing to be made up. Nothing to be contrived. No alternates. No bent rules or guidelines. For this ending contracting diagonal to work, then wave (v) must remain shorter than wave (iii) on Monday, and the diagonal should be fully retraced - below the point marked 0 - in less time than it took to build it. IF the pattern should not work, it's not because the pattern isn't there. It's not because an analyst can't count waves. It's for some other reason, perhaps like a news story. The DOW can also be counted in a similar manner.
Again, what you do with the pattern is up to you. We do think it highly suspicious that the market ended on an all-time high when we have just had two back-to-back natural disasters. That's all we can say for now.
Until later, have a very nice start to your weekend.
TraderJoe
Very nice and complex count. Thank you Joe !
ReplyDeleteWelcome & Thanks!
DeleteJoe, I have a question about your overall count. As you're surely aware, the late June/early July lows overlapped the late April/early May highs in several indexes, including SPX. So that would be a 4th wave overlap. I see that you have placed the label for iv in such a way that it ends at a higher low that doesn't overlap. Does either Prechter or Neely speak about and document examples of instances where "part" of a wave 4 is allowed to overlap 1, as long as the end of wave 4 doesn't overlap?
ReplyDeleteNeely and Prechter are at odds here. On Page 5-8 Neely says, no part of wave 4 may overlap any part of wave 2 in a trending impulse at polywave degree or higher. Prechter says "some overlap allowed on intraday or hourly charts, particularly in highly leveraged markets, but there should not be overlap on a closing basis."
DeleteNeely tends to be pretty strict in some areas - like the b wave of a zigzag can not go beyond 61.8%, and I don't quite know where he gets those ideas from.
Thanks for the clarification. I'm still puzzled as to how to group these waves. I see several different potential groupings, but they all have one issue or another. By the way, there's no way to avoid a wave 4 overlap in OEX. Even the higher low overlaps in that spot.
DeleteSee tomorrow's report.
DeleteJoe, Thank you for your work,
ReplyDeleteMy question is how significant a 5 min pattern to the overall direction of a market ? shouldn't we look for a confirmation on a bigger time scale such and a daily chart before we come to any conclusions ?
Regards
AZ
In general, yes. Confirmation is required. Please just see Saturday's post and note my comment regarding 'flexibility'. Also, if you have not reviewed my paraphrase of Ira Epstein's guidelines for trading - much earlier in the blog - you may wish to do so. Let me know if you need the link.
DeleteThank you
DeleteSalut à tous
ReplyDeleteLa phase 3 peut durer encore 1 an si on regarde 2012 à 2014
See Saturday's post.
DeleteHello Joe, is this possible, as you earlier say:
ReplyDeleteWe have set (4) on august 21 on 2417
After that, a triple zigzag in upper direction
Triple zigzag is a potential expanding ending diagnal for minute (5) of minor 3
1 of minute (5) is the triple zigzag w-x-y-x-z
x -> z is a a b c
c (of a b c ) = 1 2 3 4 5
5 (of 1 2 3 4 5 ) -> z is a ending diagonal i ii iii iv v
v ( of i ii ii iv v) is also a very small ending diagonal
The top on sept 15 on 2500 is the first leg of a greater expanding diagonal for minute (5) of minor 3
Regards,
Tref
Hi, please see Saturday's post, first.
Delete