Saturday, March 30, 2019

Can the DOW make a New Local High or the 90% Level ??

One thing about Elliott Wave analysis is that it helps teach one how to be flexible in viewpoints and look at different markets in different ways at different times. Some people will find this maddening. Others might liken it to solving a crossword puzzle, waiting for certain clues to fall into place. Now some people absolutely hate to do crosswords; they don't want to waste their time - especially when it comes to just trying to figure out someone else's obscure references. I've often suggested they should pay you to do crosswords - as an incentive to get especially younger people to broaden their view points. Well, sometimes, the market does offer such compensation, if the clues can be figured out.

So, we have suggested that Monday might be a day that sees price inflows. But we don't know if that will be the case. And, even if it is, what stocks will the buying be centered in? Will it be Boeing or Apple? No one can know except the people doing any such buying. Will they sell the Russell again to buy the Dow in a somewhat defensive move against any potential down turn? With that question in mind, I had a fresh look at the Dow chart this weekend, and it appears below.

DJIA Cash Index - Daily - Potential Triangle

In a previous post, (see this LINK) we noted how the Dow might be making an expanding diagonal downwards. But, that count seems to have a degree violation in it - that the third wave's sub-waves are too long compared to the first. 

And so that leads to the conclusion of the logical opposite - that the venerable Dow might be making a very sideways triangle instead of a downward diagonal. All we can say at this point in time is that the DOW has, indeed, make a validly formed triangle. It has not made the downward diagonal, although such a potential diagonal has not formally invalidated, yet, either. And that means there could be an attempt to pop up out of the triangle.

We certainly have seen market periods where the indexes diverge from each other for days, nay, weeks at a time. This might be one of them.

Readers concerned about degree violations might note that in this count, wave ((b)) would now be longer in time than wave ((a)), meaning that the degree of the waves definitely turned. This is shown by the Fibonacci ruler, below where you can see where this potential triangle pattern is now more than 100% x ((a)).

Then, too, there appear to be no degree violations in the triangle as each of the triangle's green minuet waves ( ) is smaller in price and time than the minute degree  (( )) wave.

So, in this index, as in all others, we must be flexible and patient. It is possible for the Dow to pop up out of the triangle. Readers of yesterday's post know we are expecting at least one more wave series up in the S&P500 (based on the ES E-mini S&P500 futures). What does this mean for the Dow? Perhaps the above chart helps explain it. Only time will tell.

Have a very good rest of the weekend.
TraderJoe


43 comments:

  1. Thanks Joe.
    Speaking of broadening views, I am wondering if you find any similarity between the inital move off 2009 bottom in march and the move since bottom in december 2018.
    See attached
    thanks




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    1. https://imgur.com/wtUoB8z

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    2. No, because in the 2009 chart you left out the 2007 top, whereas in the 2019 chart you included the 2018 top. Also, one is priced at 906, and the other at 2,800.

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  2. hi joe
    a weekly chart would be welcome
    thank you

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    1. It's temporarily meaningless until one of these patterns begins to emerge clearly.

      http://studyofcycles.blogspot.com/2019/03/the-same-three-waves-down.html

      Copy and paste as needed.
      TJ

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  3. Head and shoulders pattern with left shoulder originating in early 2018 with descending neckline would portend a rapid decline from here.

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    1. "Here" should state whenever the current B wave is complete.

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  4. Interesting videos to pass a spring sunday and hear other points of view about the current market situation.

    Ciovacco on the recent yield curve inversion and similar situations in the past
    https://www.ccmmarketmodel.com/short-takes/2019/3/29/does-an-inverted-yield-curve-mean-a-devastating-bear-market-is-coming-soon

    Lara Iriarte and her bullish view
    https://www.youtube.com/watch?v=MRdqjcJpsV4

    and, as usual, youtube Ira Epstein's End of day financial videos that I find very instructive
    https://www.youtube.com/watch?v=RM-pTazUihM

    Any other suggestions, from anyone, of similar (credible) sites/videos?

    Have a nice Sunday all, and thanks Joe for your educating style.

    ReplyDelete
    Replies
    1. What is your opinion of Joe Hentges?
      https://youtu.be/vjkRbNNjYkc

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    2. Thanks.
      I'll have a look... I understand he publishes one video each Sunday.
      At first sight I don't like his style (it seems to me that he doesn't explain too much, but I saw only this last video) but he may be useful for an additional point of view.

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    3. He has changed the frequency of his free video's. He posts on YouTube, but also twice per week on his own website: https://joehentges.net/free-market-update-j/

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  5. Thank you Joe! I am new to trading (<2 years) and have been enthusiastically reading, learning, and practicing daily. I have been following this feed for a couple of months now and appreciate your commitment to objectivity and precision. I am excited to post for the first time and help (potentially) contribute.

    I have been doggedly learning about EWT for only about 6 months. The SPDR S&P Oil and Gas Exploration and Production fund (XOP) has frustrated me since December, but I now have a count that I think checks out. I bring this up now because I see that it complements your S&P count as well as your Crude 3-wave count.

    I am here to learn and appreciate any feedback or critique about my counts here. Like I say, very new here and will undoubtedly have plenty of errors!

    XOP 30 min: https://www.tradingview.com/x/qANoE0nj/
    XOP 5 min: https://www.tradingview.com/x/wHjqU2S5/

    According to my analysis, this count seems to be supported by local breakaway, measuring and exhaustion gaps. This as-yet-complete minor impulse down has good alternation and I'm expecting a final 5th wave (potentially started?) down to retest the December lows for a potential intermediate [2].

    Thanks again!
    -Steven

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  6. Joe -

    I'm learning how to have an open mind in terms of how waves can evolve. You referenced a link to one of my favorite posts above, reproduced below here for convenience.

    http://studyofcycles.blogspot.com/2019/03/the-same-three-waves-down.html

    My question is:

    Given that the Oct 2018 all time high has a confirmed count for a large degree primary top since 2009 bottom (based on another post or a video which I couldn't find unfortunately), doesn't that imply that the three waves down since then can only morph into a diagonal? If it is the start of a flat, double/triple zigzag, or a running triangle, then it implies the primary wave high in 2018 is not really confirmed.

    Thoughts?

    Thx

    -TJ

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  9. Thanks TJ,
    Here’s another take on the bearish expanded diagonal:
    https://i.imgur.com/rX0rDRe.png

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  10. If a subwave of Y is bigger than all of W that would be a degree violation right?

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  11. Looking at a 1 hour chart I was wondering if this was a 1 2 up. RSI could end up negative divergence so I waited till open. ES 4 hour is showing nice divergence. (Price and RSI) I wanted to ask everyone is this chart bearish? Now if we break 2861.25 I'll assume it's bullish.

    https://www.tradingview.com/x/o6e4P3q5/

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    1. This is all really way too funny.
      Exactly what will it take??

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  12. Think were are in a Gold triangle. At this time we would be in the d wave. Using a 10 minute chart.

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  13. Moving the channel but anything above a and have to clean the screen and start over. :(

    https://imgur.com/1Uz24M1

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  14. I still like the idea of c of 5 of EED on SPX.

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  15. Got to make it to Friday so 5 is longer in time than 3.

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  16. Is this market break out an April fools day joke :)

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  17. Updated gold. As close to a perfect .786 triangle as one can expect.

    https://imgur.com/UQ3brh2

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  18. potential ED count with 2858.98 as i, iii at 2860.03 but it looks like iv took longer than ii - that would not be allowed so just watching

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  19. Getting close to the reveal.

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  20. I've lost all my counts... :(

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  21. Triangle lost prior d wave, forced to move to barrier triangle.

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  22. Nothing is for certain yet, but this still has to be a possibility.

    https://invst.ly/afmg6

    TJ

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    Replies
    1. The DOW finally managed the marginal new high.

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    2. Sorry for a "EW student's request".
      Isn't wave (iii) a Flat? It seems to me that wave b retraces almost all wave a.
      How can a Flat be a wave of an ED (or, in general, of a triangle or LD)?
      Shouldn't all those waves be a zig-zag?

      Thanks for a clarification.

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    3. We now know wave (iii) can 'not' be a flat because it went over the high. It is not corrective, but motive.

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    4. And it's sort of difficult to argue with it being in either a third wave (or possibly fifth wave) with that massive gap in it. More likely third as it did not show the typical characteristics of an exhaustion gap, by filling quickly.

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  23. entire move has similar look of 2009 and 2015 initial moves with second wave over the top and not fully retracing its initial down move. An important consideration is if the whole move from 2009 is not done then using wave degrees what are valid counts. If I'm not mistaken one of them is extremely bullish.

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

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