Thursday, May 10, 2018

The Larger Potential Triangle

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)

On the previous post, we outlined the case for the potential smaller triangle, and we noted how many pundits and web-sites were beginning to copy our view. The smaller triangle is certainly valid, and continues to be so. But, below, we outline the case for the larger triangle. We do this now, only after the prior a wave high has been exceeded to the upside.

S&P500 Cash Index - Daily - Larger Triangle Scenario

It is interesting how varied the b waves have been in form and structure. Starting from the left, the first b wave is a Flat. The second b wave is a triangle or running flat, and the third b wave is a triple zigzag or diagonal as we have pointed out.

In this larger triangle, the purpose of the minuet c wave of the minute (d) wave was to push out the upper border of the triangle. I have referred to this as the triangle 'breathing" once, or "expanding" once. This up wave does, indeed, seem like a c wave. It has daily gaps in it, and it is at a steeper angle than the prior a wave, upward.

IF a minute (e) wave begins lower, it's purpose will also be to take up time and move price sideways. But, more than that, it's purpose at some point will be to impulse downward enough to scare some people that downward movement will continue, when, in fact, the market would likely reverse and head higher. It might do this by exceeding the prior b wave lower.

It would only be this movement that could distinguish a minute (e) wave lower, from a minuet ii wave lower, if it is the smaller triangle alternate which comes to fruition.

There is no certainty, yet, that upward price movement is completed. The (d) wave may not be done. When the (d) wave does wrap up, and the potential (e) wave begins, remember that the (e) wave could form a triangle all by itself - since each of the other legs of the triangle can be counted as a simple leg of the triangle. Usually, not always, triangles contain one complex wave sequence.

While some Elliott Wave analysts were calling for an outright decline, prices have so far refused to comply. For this reason, I simply remain neutral, patient, calm and flexible.

I hope you will too. Have a good start to your evening.


  1. Very nice. Thank you. There are still some one that is counting (1)-(2) 1-2 instead of (a)...(d). Anyway, very interesting days.

  2. That sure would make a symmetrical triangle.

  3. Joe did you delete your Youtube account?

    1. Yes. First due to misuse, and second because any future videos would be available here.

    2. good plan. many thanks for your generosity.
      yoou have the holy grail and we found it through bessed.

    3. Thank you Joe. I always look forward in reading and listening to your analysis. You have a wealth of knowledge and I'm sure everyone is grateful for you share it with us.

  4. goood plan.thank you for your generosity.
    you have the holy grail and we foud it through you.
    be blessed.

  5. Thanks, outstanding work with these potential triangles so far.

    Shouldn’t the momentum preferably diverge between the D and B legs of a triangle?

    1. ...if you put 120 - 160 candles for the 'wave of interest' which would be the triangle. So, an 8-hr - 12 hr chart might work to see that divergence in futures, and such a divergence currently shows in the 4-hr chart in cash. Otherwise, the smaller triangle may be more applicable.

  6. hi Joe,

    We are waiting for your updates.

    I have questions:

    1. Are you still expecting a larger Triangle
    2. If so, do your think D is done? or very close to finish? or need a higher high?

    Thanks a lot.