Wednesday, January 9, 2019

For Planning Purposes

There have already been some overlaps in the overnight futures. The chart below would be triggered particularly if there is overlap on 2,603 in the daily futures. (Note: it also works without the overlap, but the overlap would be a clear signal.)

ES E-Mini S&P500 Futures - Daily - Start of a Diagonal as Alternate

Why this count? Within any diagonal, waves 2 and 4 simply 'must' be zigzags. The clearest upward zigzag on the chart is the present one. That 'likely' means it is wave 2.

The clear downward diagonal in October would be the minute ((a)) wave, as diagonals are 'often' A waves. The November correction counts best a a double zigzag, and while it 'could be' a second wave, if one fiddles with the count to get it to be a simple zigzag, as it is, it would count better as the minute ((b)) wave.

The December decline would be the minute ((c)) wave of the Minor 1 wave. It has no divergence on the daily Elliott Wave Oscillator. The entire zigzag lower would have formed in a neat channel.

This second wave up, Minor 2, if it did not form a triangle, would be a clear "degree violation" with the minute ((b)) wave. Therefore, it would have to be the larger degree wave.

I am not in favor of calling the diagonal down in October a three-wave sequence. The reason is that it's entire length down was needed to establish the lengths of the sub-waves in the December decline.

Clearly such a forming downward diagonal in no way implies that the entire bear market is over as some suggest. Once again, I do not like changing wave labels, but if overlap occurs, it would likely break rules that can not be broken, and I will always follow the rules.

Have a good start to the day.
TraderJoe

P.S. Based on the hourly futures, and all of it's overlaps, this is the only upward count I can get to work.


ES E-Mini S&P500 Futures - Hourly - Too Many Overlaps

59 comments:

  1. Thanks Joe for this clarification

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  2. Do you notice the McClellan Oscillater level ???

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  3. Joe, thanks.

    Before I came to this blog I knew nothing of wave degrees. You ave taught me a lot - and I am grateful. The most fascinating thing would be one you would talk about things being "predictive". I pay very close attention to details because I believe in what you are doing.

    Ever since the fed rally and degree violation the next day I have been stuck on the count of the decline. From that point on i continued to measure the waves the way I had learned from you, and in real time counted 5 waves down, and posted a simple fix to your count the next day which gets us to the alternate count:


    Marc SpunginDecember 24, 2018 at 12:10 AM
    Joe,
    I like your count and comments.
    if count doesn't play out above,
    I believe measurements allow for
    a morning rally shy of 2440 then blue (iii) to travel to approx 2375, or
    blue (v) could have ended at circle(b) making circle (a) blue (iv), opening door for larger rally."

    The use of wave degrees violated the count down as 3 waves - its been on track as a 5 wave impulse or corrective structure since 12/20 - there was a wave in there too long - which i never seemed to be able to communicate properly but i didnt want to stop trying.

    The wave (being a friend of mine) knew it had to extend to where it did because it had to make clear it was 5 waves not 3. The final move down and subsequent rally have been more in line with the alternate - so maybe it is primary even if no overlap.

    Thanks for everything you do

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    Replies
    1. Welcome. Yes, the EWO also going higher than +40% was also a clear warning sign regarding the count.

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  4. nice to see a new count, ET - but the c wave looks like three waves down, and not 5 ?

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    1. It's after the fact, but try 0 = 2793 (* y failure), (i) = 2,583, (ii) = 2,686 as a zigzag, (iii) = 2,483, (iv) = 2,506 as a flat, (v) = 2,346. Five non-overlapping waves, with (i) = 210, (iii) = 203, (v) = 160. Best I can offer.

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  5. Thanks Joe for the update! Your chart would imply it kiss the 50 DMA

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    1. Welcome. If minute ((c)) = minute ((a)), then a touch of 50 SMA is possible.

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  6. Joe,
    When a larger impulse begins with a leading diagonal as opposed to a smaller impulse, does that make a different statement about the size or characteristics of the larger impulse?

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    1. Circular how? All I'm asking is that if wave 1 of an impulse is a LD does that say anything about the size of waves 2-5?

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  7. Thank you Joe for the update!

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  8. SPX 10 mins chart with around 122 bars is showing divergence on EWO, each high has lower EWO reading.

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    1. Expanded diagonal from 2547?

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    2. Unable to find it, can u give me the co-ordiantes.

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    3. 0=2547, 1=2560, 2=2550, 3=2567, 4=2554, 5=2589 which might be (1) of a bigger contracting diagonal that ended 2595.

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  9. If yesterday's gap-filling five-waves down was the 'c' wave of a 'flat' fourth wave, then this Russell count would indicate the up move is getting pretty mature.

    https://invst.ly/9qlqe

    TJ

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  10. ET, in diagonals should one pay attention to time length in addition to price length ?

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  11. Thank you Joe, these corrective waves cause a headache. Is an never end.But I agree it looks that it will end very soon.

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  12. Until and unless lower line of uptrend channel impulsively broken and successfully back-tested, calling reversals is a fool's errand. The battle of the gaps puts the bulls firmly in charge...

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    Replies
    1. Verne is correct. There is no 'clear' top signal yet. Everlasting divergences, yes. But no key reversal, etc.

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  13. Joe, for 3 weeks you very carefully, and in great detail, counted down the move from 2800 to 2347. You had the count as (i), (ii), (iii), and you thought the wave up was wave (iv). Now you've had to change the count because wave (iv) has been invalidated, but along with that, you are now saying that 2800-2347 is an impulse wave. How is that possible? How does a 3-wave subdivision become a 5-wave subdivision 10 days after the fact? IMO, I don't think 2800-2347 can be counted as an impulse wave, which means that 2941-2604 has to be counted as a 3-wave subdivision as well. That means that everything from the top has subdivided by 3.

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    1. I provided the impulse count above in response to another comment. It is the case where the first wave is the extended wave. It almost always forms a contracting wedge. And it always messes me up, because the 'usual' expectation is for the third wave to extend. I clearly see where the error was.

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  14. any 3 wave count will have degree violations unless you want to terminate and leave b wave which messes up moving along

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  15. joe, thanks, notice how the EWO on chart above hasnt confirmed a wave 4 and heading lower right now would probably keep it that way which supports the alternate. I count c as complete but can go higher. Futures are lower and if we trade 10 pts lower i thnk it gets us a degree violation.

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  16. I don't think there is overlap until 2626 as I had the first wave bottoming on oct 26, the lower low it made after as a b wave of an expanded flat of 2. The fifth wave of the first was an ED which was complete on 10/26. Just a thought

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  17. Joe, Thank you so much for being the rule follower to Elliot Wave. With your alternate posted above with wave 2 ending at the top of the channel (2603) would we still expect wave 3 in the next sequence to be the "extended" wave (based on probability) and be 1.618 of wave 1? Because if so....that is quite a scary drop.

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  18. I'd say no it won't. That is typical in a leading diagonal. 3 will be shorter than 1, 4 will be shorter than 2 and overlap 1, and 5 will be shorter than 3.. that's what gives it the "look" of a diagonal...... Oh and then IF a diagonal completes for P1 then we can expect a retracement upwards of 78.6%.. which would confuse the hell out of the bears and bulls...

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  19. Survey: Which index level do we see first? Two seperate questions.
    (1) 2250 or 2800
    (2) 2000 or 3000

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  20. Before we get on-board the jump-to-conclusions mat, I am not seeing any violations so far for the existing count from December that Joe has posted. I don't think we should be predicting anything until it violates (and if it does tomorrow so be it).

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  21. Thnx ET. You are saying the following "This second wave up, Minor 2, if it did not form a triangle, would be a clear "degree violation" with the minute ((b)) wave. Therefore, it would have to be the larger degree wave". If we count Minor 2 as 4 and ((b)) as 2, will it still result in degree violation ? I assume not as they will be of same degree and there is no restriction on the size of same degree waves.

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    1. Partially correct. Not if 2,603.89 cash is overlapped upwards. That is the 'size restriction' on 4.

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    2. Agree, sorry forgot to mention without overlap. Thanks.

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    3. As long as any correction in C is smaller than all of B, C is allowed to extend?

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    4. So C would need to drop 75 pts to validate zigzag?

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  22. 2635 target tommorow. Shorty op there. Won't violate any of Joe's counts that I can see. Futures megaphone project there at least short term.

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  23. I have added a P.S. and a chart, based on the ES hourly. There are too many overlaps for any impulse. I tried several. But a diagonal counts just fine.

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    1. The waves contract in both price and time, and even wave ((4)) is shorter in time than wave ((2)).

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    2. Thanks ET. On a 10 mins ES chart one can clearly see an impulse following 8 fold paths with around 113 bars. Need to give a new low and then retrace for 2/B up.

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    3. Readers of this channel might want to note how stinkin' shallow that first (B) wave retrace is. That is a clue that 'something is up'.

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  24. A couple questions TJ.

    (1.) If I understand correctly, the "preferred" count is still that we're in minor 4 until 2603 is exceeded on the SPX. You have mentioned the upward zigzag since the 12/24 lows could be the (a) wave of a triangle. Could that also be the (a) wave of a running flat, where the (b) of the flat makes a new low in the same fashion as the (b) of a running triangle?

    (2.) If so, would the total price travel of minor 4 be taken from the start of (a) to the end of (c)?

    (3.) With respect to the alternate count above, does it matter that minor 2 is much shorter in time than minor 1?

    Thank you in advance for your insight.

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    1. A straight impulse down, while still 'possible' has become less likely because there are not 120 candles on the daily chart. It has also become less likely because wave minor 2 takes less time than minor 1. So, a diagonal remains on board. Here is where one's patience and flexibility really come into play.

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    2. Okay, so I guess I'm a bit confused. Your chart above (the potential diagonal) is labeled as the "best alternate." I understood that to be an alternate to the impulse down. But iF the impulse down is less likely, and the diagonal is the best alternate, then what is the preferred count at this time?

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  25. ES is having 5 waves down & 3 waves up to 78.6 retrace ?

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    1. Down move from that level, need to see how it shapes up.

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  26. ES is so far stopped by the daily neckline.

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  27. It's a volatile day with the powers that be trotting out all the FED governors and Chair Powell to say how 'patient' they can be. But is chair Powell becoming the 'poster boy' for the bear market with statements like this: true as they may be? (Copy and paste link if needed).

    https://www.cnbc.com/2019/01/10/fed-chairman-powell-says-he-is-very-worried-about-growing-amount-of-us-debt.html

    Today's cash market has three waves down and a deep retrace which could start another diagonal lower. But, the count depends on whether we take out today's high or low first.

    TJ

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  28. I have never seen a market this inscrutable. Money flows clearly indicate massive infusions of cash and I think we are seeing unprecedented wave distortion.
    I was also musing on some kind of diagonal but his is NOT the way they conclude.
    The lower line of the diagonal once broken should see a rapid an un-interrupted retrace to the daigonal's point of origin and we are STILL seeing arrests of the market's attempt to decline. Having said that, it seems to me all bets are off when it comes to normal market behaviour. We have entered the TWILIGHT ZONE!

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  29. "We have entered the TWILIGHT ZONE!" also called the "Plunge Protection Team"... who knows what they are doing without the public's knowledge. Funny thing is they think they can prevent the next crash, just like all the previous ones.. It's almost to perfect...

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  30. The stoch helped to provide a likely path for SPX (15min). The following charts were posted at SA (first yest after close) and today after the close. You can click on them to enlarge. I find the stoch quite helpful as it works well with the AO as does the 3/10 below. I believe you'll see how it helped sift through some of the noise. In an up move, stoch pullbacks are "2"s, "4"s, or "b"s. In down move, pullbacks are likewise. Its a great compliment to the AO as these charts show.

    https://imgur.com/a/wYvyJS1

    Hopefully I've done the link properly.

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  31. Joe, do you have any faith in counts that 2016-2017(2018?) is first wave of an extension and we are now in 3rd wave? I think both of the large waves 1 and 2 of extension can be counted without violation given the effort. Just curious if you have explored that outlandish scenario.

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  32. I find it fascinating that the entire world economy now looks like the three stage bubble pattern. I think the idea is backed up by the EWO on the monthly.

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  33. A new post has now been logged for the next day.

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