Saturday, September 30, 2017

Lest We Forget

In weeks past, I showed how a different conclusion than the Elliott Wave International count on stock indexes was possible, if two things were considered: A) the low of the election night in the futures were considered as a wave 2, and B) if Neely's consideration of the meaning of the wave three trend line is that no part of wave three should break below a line connecting waves 0 and 2.

With those two ideas in mind, I can now only offer the following chart as an objective assessment of the current situation.

ES E-Mini S&P500 Futures Weekly

Because of the measurements on the right-hand side of the chart, I don't have to say too much. First, at Friday's high of 2517.75, we have not quite made the target of 2518.25, yet. Fractions away. And, yes it is possible for a 1.618 to be over-shot slightly. But, not by much ... otherwise something else is going on. Hence, the reason I contended in Friday's post that risk is increasing.

Student's of Elliott Wave know the importance of a 1.618 measurement. But do any of us appreciate what really happened on election night, with the drop of more than 100 points in the futures, and then regaining all of it and more in less than twenty-four hours? Lest we forget ...

Have a good rest of the weekend,
TraderJoe

Supplemental: To answer questions regarding the current status of the market versus The Elliott Wave Oscillator, I have attached this supplemental chart of the S&P500 Index on a three-week basis. That is the time-frame that provides between 120 - 160 candles from 2009. It currently provides 149 bars.

S&P500 Cash - Three Weekly - The Eight Fold Path Method

The monthly chart - at this time - would provide only 8 yrs x 12 + 5 = 101 candles. On this time frame, the EWO has diverged and is currently red. It is also worth noting where current price is in relationship to the upper channel boundary.
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19 comments:

  1. domSeptember 30, 2017 at 5:35 PM

    Salut joe
    Le point haut de la phase 3 va être ou??
    D'après toi ?


    ReplyDelete
  2. ToddSeptember 30, 2017 at 5:37 PM

    Hard to believe risk is increasing when Financials, Transports, Tech Stocks, Semi-Conductors, Home Builders, Industrials, Japan, Germany, and Russel are at new highs.
    There are way too many good breakouts to support this count, imo.

    ReplyDelete
    Replies
    1. Elliott_TraderSeptember 30, 2017 at 7:41 PM

      That's basically the argument that when stocks go up, they go up forever. Unless you have a target, you are just expressing a guess.

      Delete
    2. mblctaSeptember 30, 2017 at 8:50 PM

      You were probably saying the same thing in March 2000 when SPX rallied 16% in that month alone. Of course, we now know that was the dead high.

      Delete
    3. ToddOctober 2, 2017 at 10:40 AM

      C'mon Joe, what kind of silly response is that? "when stocks go up, they go up forever?" My argument is based on a healthy market. If you go back to major pullbacks, you will find certain important sectors failing or diverging at the very least. In 2008, financials were screaming and showed a massive red flag. In 2015, Biotech was showing massive weakness. As you might recall, biotech was a very strong "leading sector" during the bull run. Other sectors were diverging too. My point is, at this time, no important sector is struggling. Many of them are too strong and I think it's nonsense to say we are near a top. Of course, you said we were very close to a top when S&P was at 2100. But, I can't prove that because you erased 6 months of your posts.

      Delete
    4. Elliott_TraderOctober 2, 2017 at 2:51 PM

      We were at 'a' top at 2,100. The market dropped from there to 2,000. So that's a great call. Not a bogus call. Secondly, I just want you to be aware that the logic you are using is formally known as "the fallacy of linear extrapolation". Unless you state a target and timing, the market can go up or down, and your ideas are never at risk.

      Delete
    5. ToddOctober 2, 2017 at 8:12 PM

      Hi Tim,
      That would be a good start. Unfortunately, I don't think it will be enough.

      Delete
    6. ToddOctober 2, 2017 at 8:20 PM

      Joe,
      You made your "the top is near" prediction at the end of 2016. The market never pulled back to 2,000. So, I think you are thinking of an earlier call.
      The botom line is I have yet to see EW effectively and consistently work well for anyone.
      I'm still hoping you can prove me wrong.

      Delete
  3. mblctaSeptember 30, 2017 at 8:57 PM

    Thanks Joe. The election night low has always bothered me, so I have always thought this count made the most sense.

    Another interesting fact is that the move from 3/2009 to 5/2011 was 700 points. Then 10/2011 to 5/2015 was 1050 points. (1.5x 700) And now we have rallied 700 points from the 2/2016 low. Has nothing to do with EW, but interesting symmetry nonetheless.

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    Replies
    1. Elliott_TraderOctober 1, 2017 at 8:42 AM

      Also interesting is The Eight Fold Path Method from 2009, shown as a supplemental chart; added later to answer a reader comment.

      Delete
  4. jacksparrowSeptember 30, 2017 at 10:46 PM

    Couple of questions ...in dow the Elliot oscillator (monthly basis) seems to be stronger/higher for the move that started last year compared to the previous move that started in 2009...does it open the possibility that the move from last year breakout could be a third wave of the move that started from 2009
    A general question, is it possible to have a truncated 5th ie below high of B (if 4 was expanded flat B higher than 3rd)..thanks

    ReplyDelete
    Replies
    1. Elliott_TraderOctober 1, 2017 at 8:43 AM

      The Eight Fold Path Method from 2009, shown as a supplemental chart; added later to better answer your comment.

      Delete
    2. domOctober 1, 2017 at 1:02 PM

      Salut joe
      Le graphique est clair
      Il faut juste trouver quand le débutde la phase 4 et la fin de la phase 5 V
      Ça va être dure dans le timing

      Delete
  5. ViveOctober 1, 2017 at 2:18 PM

    Thanks Joe and nice supplemental chart. To me the chart suggest if 2017 is a repeat of 2014 then we continue a lot higher for several months and in to mid 2018 before we see a top.

    ReplyDelete
  6. domOctober 1, 2017 at 2:54 PM

    Selon le calcul
    On est à 149 bougies si on va à 160
    Ça fait encore 8 mois de hausse pour trouver le sommet

    ReplyDelete
  7. JeffOctober 2, 2017 at 12:20 AM

    I'm a fairly new student of Elliott Wave that has been studying Neely's book for the last six months. My count led me to the conclusion that we are going into a W4 correction. This post has provided me more conformation, much appreciated.

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    Replies
    1. Elliott_TraderOctober 2, 2017 at 9:07 AM

      Welcome Jeff, and glad you are digging into it. It certainly doesn't start out as an 'easy read'!

      Delete
  8. domOctober 2, 2017 at 1:06 AM

    Salut Jeff
    Oui une correction arrive
    Faut juste trouver la date
    Tu as une idée ? ??

    ReplyDelete

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