Wednesday, October 11, 2017

Triangle Completion

Market Outlook: A Fourth Wave Triangle in Minor 3 Completed Today
Market Indexes: Most major U.S. Equity Indexes were higher, except RUT
SPX Candle: Higher High, Higher Low, Higher Close : Trend Candle
FED Posture: Quantitative Tightening (QT)

The market - as measured by the S&P500 cash Index - opened slightly higher and immediately traded slightly lower to fully complete the triangle we suggested was possible yesterday. The running triangle was validated as the (e) wave was below the high of the prior wave 3 but above the prior wave (c). And the purpose of the triangle was to waste time until the FOMC meeting minutes were released.

SP500 Cash 30-Minute Chart - Triangle Completion

After prices left the triangle, they jerked steadily higher. The cash market did not make a new all-time high before the end of the session, but the futures did. I expect cash might make the new high tomorrow. The futures volume was exceptionally low at only 796k contracts, and may be the lowest non-holiday trading volume of the year!

Once this wave wraps up I'll try to put it in a larger context for easier understanding. However, now that a triangle has been validated, it becomes more likely that if prices trade below 2540, it would mark a turn point of a certain degree. And - just a reminder - all of the open gaps are below the market at this point in time, and a triangle often represents the last wave in a particular sequence. But, what should bother the outright bears a tad is this is another running triangle, at the top of the market, and running triangles, with their higher (b) waves still have bullish implications. I'll try to explain more later.

For now, have a very good start to your evening!
TraderJoe

9 comments:

  1. As an outright bear, I'm glad to see momentum dying off. We are at max extreme bullishness at the same time. Not sure who's left to buy?

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  2. Joe, SPX did make a new ATH at the close, by one penny.

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    1. Thanks for pointing that out. It must have been one of those "after the bell" settling out issues. It did not happen on the 15-min bar that was in progress at the close. Regardless, it is not material at the moment as higher highs were expected. Good to know though, so thanks again!

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  3. I wonder if the markets realize Trump is going to pull out of NAFTA by the end of the year? This is going to get really interesting! China also said they are close to a major trade war with the US! Great news for the bears! Bad for Americans.

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  4. Pour l'instant ça monte encore et encore
    Il n'y a rien qui arrête la hausse
    Objectif de la hausse????
    En point et la date ????
    Si quelqu'un a une idée merci les gars

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    1. Markets will top this week. The markets will close in the red by the end of the year if my analog is right. We are possibly looking at the worst crash since 1929 within a month. Margin calls will be historic! Investors are about to learn what risk is all about.

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    2. Do you also post on OEW site as JK?

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  5. Hi

    I've been following the DJIA (including overnight sessions) with your count on S&P and this is what I see:

    https://postimg.org/image/76z6h7d7u3/

    Many thanks for all your efforts for us.

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    1. Oh I forgot to say....look at the RSI divergenceon this move!!

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