Monday, March 5, 2018

How You Can Tell - 3

Market Outlook: Now Getting Higher Volatility
Market Indexes: Major U.S. Equity Indexes closed higher
SPX Candle: Higher High, Higher Low, Higher Close - Trend Candle
FED Posture: Quantitative Tightening (QT)

Today added some evidence to the still potential triangle count in the S&P500 Cash Index, with the higher high candle. By no means, is it a done deal.

Prices, as measured by the S&P500 Cash Index, had closed Friday at 2,691.25. The futures initially gapped down about -13 points on Sunday night, then traded high enough to close the gap down open, and then turned lower for Monday's opening. As a result, the cash market opened down around -10 points to open at 2,681 and traded lower yet to 2,675 and stopped there - all the while respecting an up trend line from Friday's low.

Then, around 10:30 am ET, the market turned around and traded higher once again, breaking Friday's high. Although close, they did not break Thursday's high, and closed at 2,721, up about +30 points.

Additional follow-through to the upside is needed for the deep triangle count. A break of the daily downtrend line from the highs would further support the "DEEP TRIANGLE" count presented Sunday, or something more bullish higher. A break of the daily uptrend line from the 09 Feb low, would be more evidence for the "SHALLOW TRIANGLE" count, or something worse to the down side.

Have a good evening.


  1. Higher Volatility and volume are needed for a triangle and we have that. If 4th wave needs to be longer in time than 2, using my weekly chart 5-21-18 would give us 16 bars. With a 2 placed at 6-27-16 we would be longer in time. If 2 is 10-31-16 than that would give us time to reach the bottom of my trend line. However this 4th wave wouldn't end until 8-20-18 and I'd have 132 bars starting from 2-8-16.

  2. Is there a way to count the triangle now where A-B-C are already complete and just waiting on D-E? Or are there time rules?