Thursday, March 7, 2019

Below Zero

Although some might think so depending on their locale, but I'm not talking about the weather. Instead, I'm talking about the fact that the Fisher Transform indicator in the daily S&P500 Index chart, below, has now made it's first close below the zero line. Although the histogram bar is too small to see, the black arrow in the lower right points to the indicator flag now showing a negative number.

SP500 Cash Index - Daily - Fisher Transform Closes Below Zero

We stated that once this indicator finds it's divergence it is a relatively smooth transition to it's lows. That said, depending on the exact Elliott Wave count lower, you can see - as in November and December of last year - that a few smaller term and smaller height humps might be made on the way down.

Prices traded low enough today to close the first gap from the top - now shown in the black circle on at the upper right. There is another gap at 2,709.80 which represents the 62% retracement of the entire move upward from December 24th. (It is not circled). That gap, too, is likely to fill.

Just as we did on the way up, we are looking to count five minuet waves down to a minute ((a)) wave lower. We have not yet completed the minuet wave i, but have a good start on it.

This is just a reminder that tomorrow is the payroll employment report before the market opens, and the count we have allows for some volatility and whipsaw around today's close. So, as always, be calm, patient and flexible.

And have a good start to your evening.
TraderJoe

16 comments:

  1. Missed overlap with (i) up of C by .11 SPX points

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  2. Great site Joe, enjoy your work very much.

    Minuet 1 so far is 4 days. For sake of the question, assume it finishes in 6 days. This means minuet 2 must consume minimum 6 days?

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  3. Or to broaden my question and clarify - I'm unclear on the time relationship of wave 2 to 1 - you often look for 2 to run longer then 1. Thank you

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    1. typically, but not always. It is 'not' a rule, but a good guideline in an impulse wave, only.

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  4. Did you post a count after the end of day today? I don not see a LINK. Thanks

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  6. ON futures are red - breaking W1 of C.

    Joe, as you noted in yesterday post, as we are in 3rd down we should put the channel around the 15 min and look for it to break it to the downside. Use the common 1.612 and 2.612 extensions as potential targets?

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  7. I meant (i) of C

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  8. Price has now pierced the lower 'base channel' boundary on cash and is beginning to close in on a 1.618 extension. Chart below.

    https://invst.ly/a8ahz

    TJ

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    1. Joe, it looks like you're counting from the top at 2816.88, not from the truncated 5th at 2814.92. I know that the difference isn't that much. I'm seeking clarification for my Fib counts, and also for technique. Please advise. Thank you.

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    2. Target for 1.618 is 2,719 from the truncation, or 2,717 from the nominal high. This is a 2 point "fib cluster". If that is important to you, you may not be looking at markets with the proper perspective.

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    3. Thanks, Joe. Just seeking clarification for learning purposes.

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    4. Your count fits for me. IBD Leaders continue to show signs of trouble. Many of the IBD leaders are stable, but there are too many that are rolling over. This does not happen in a healthy uptrend.

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  9. A new post has been started for the next day.

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