Thursday, October 5, 2017

Risk Increases - 3

Market Outlook: Fifth Wave Extension of a third wave
Market Indexes: Major U.S. Equity Indexes Higher, except DJ Trans & Utilities
SPX Candle: Higher High, Higher Low, Higher Close : Trend Candle
FED Posture: Quantitative Tightening (QT)

Prices leapt up above the channel we showed yesterday on news the House had finally passed a budget proposal. The Senate would still need to of course. After reviewing all the possibilities, it looks best like a fifth wave extension as shown below.

S&P500 Cash - Half Hour Chart

I could only count yesterday's wave as a "running second wave", and today's gap up as being in a third wave position. As you can see from the chart, there is no significant sign of a downward wave for wave 4 yet, so the uptrend may still have a little bit to go. It's possible that wave 4 will be a triangle to alternate with the flat wave 2.

This seems to agree with the NQ count - which looks like the clearest count of all - as a diagonal in the chart below.

NQ Futures Daily - Over Top of Potential Diagonal

As best we can tell, we are still in wave iii of (v) of that count, as well. Remember, in a diagonal wave (v) can not become longer than wave (iii), so, we'll see if that measurement holds.

For now, have a very good start to your evening.


  1. Joe I make the same point that i made few days ago..maybe it wasnt clear - that the EWO of DOW/NASDAQ and other markets show the highest ewo (monthly) for the move from last year rally... SP's EWO is almost is almost getting there...which may support the point that this a 3rd wave move from last year. The ferocity of the move would also support this as a 3rd wave.

    1. Looks like Caldaro is right. Nasdaq is not going down. If it does, it certainly is not done making new highs IMO.

  2. Oui c'est la 3ème vague
    Elle va monter jusqu'où ? ?

  3. Discover everything you need to know about trading and analysing the world's markets by watching our 10-part Forex trading Video Series.