Monday, May 13, 2019

Down Wave Has a 1.618 Extension

When the cash market only is considered, an impulse wave with alternation, and including a 1.618 extension in the third wave can be counted.

S&P500 Cash Index - 5 Min Close Only - Likely Impulse

There is no overlap between waves iv and i, or between waves 4 and 1. The 1.618 extension is located in the third wave, and the fourth wave can be considered a Flat wave that alternates with the second wave sharp (or zigzag) wave. Within wave 3, wave iv can be considered a flat wave that alternates with wave ii because wave iii is longer than wave i at the location shown.

There are a few things not to like - like the almost too exact fit to the channel. But, this is cash, and it is harder to count any diagonal in cash than it is in futures. The cash market has markedly different measurements than the futures market does. Further, it is tough to find 'three-waves-up' in the a wave of 4, but that wave was not exceeded to the upside, so it, too, may be a portion of a flat from 3.

The ES futures closed below the lower daily Bollinger Band today - which only happens about 5% of the time. And, the Russell did too, but the Russell also hit the 100-day SMA. So, it would be best to see if "five-waves-up" from here turns the short term trend in cash.

Have a very good start to the evening.
TraderJoe

58 comments:

  1. Selling interest was quite consistent all day and quite a reversal from Friday's large rebound. Nevertheless SPX and the DOW finished 10 & 100 points of their lows respectively. Perhaps this is not a lot given the size of today's decline but if the market is in the process of cascading down I would have expected considerably more severe selling with indices finishing much closer to their LODs. This is just one observation whilst I attempt to determine the odds as to whether today's lows marked either 1 (or nearly all of 1) of iii of C or simply i (or nearly all of i) of C. Nobody wants to be on the wrong side of the market when a wave iii down is in play so a good deal of caution is warranted at this juncture. Whilst bearing in mind the consequences of a potential wave iii down I'm leaning toward my second suggestion at the present time i.e. the market has played out only i (or nearly all of i) of C so far which argues for a decent retracement (ii of C) into the latter part of this week being OPEX week. Made my mind up moments before posted your latest chart ET so I'm with you brother!

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  2. It does channel quite perfectly. I'm going with this count for now, however it does only work on SPX cash and no other index. Plus the build of a RS on daily would line things up nicely for a longer term decline.

    The alternative is there's a giant blast down/continuous sell off day which would make the alt count seemingly obvious at that point.

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  3. As I was following cash, for once I was (maybe) a little ahead of you seeing the possible 4th wave flat (last Friday). I have the channel as well (actually dual adjusted base channels). As the entire move down is contained within parallel lines, this suggests a possible corrective move. I do have a scenario where this move down is a "c" leg of a flat, but I'll just leave it at that.
    Thanks for the post!

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  4. Thanks,
    What about this wedge on cash? No overlap
    https://imgur.com/gallery/1PtSpDx

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  5. id be careful calling tops and bottoms around this level. i have it as major inflection area between here and down a few pct. likely to see big waves unfold over next sevetal weeks.

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  6. Everyone is drawing the same channel... Be careful here

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  7. Would anyone be willing to either inform me on my question, or inform me as to my question crime for this blog?

    From 2009, there is INT 1-2-3-4-5-A-B now in C

    So what does that imply after C, another 1-2-3-4-5 up much higher in the following years? Something different?

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    1. Here's a video with one possible count. There are several counts that are out there and they all depend on when the count starts.
      https://elliottwavegold.com/2018/04/sp-500-elliott-wave-analysis-17th-april-2018-grand-super-cycle/

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  8. futures on the 15 minute time - https://pbs.twimg.com/media/D6fa_KDWwAALaWi?format=png&name=large

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  9. we are still in A its complex correction

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  10. 2019 = 1930 Spring rally. On June 6, 1930 the Dow gapped down from 263 which started the 86% decline in the markets after the Republicans and Hoover passed the tariff Bill. That gap down was NOT filled for 21 years! The markets topped out in April of 1930 moving down and sideways until the tariff Bill was signed which is all it took for the Depression to kick in full gear. From April 1930 to June 1932 the Dow crashed 85%. Think about that? The 1920s biggest and longest bull market rally at the time was completely wiped out and retraced 40 years of gains. How confident are you that history will not repeat again? Every recession and Depression takes approximately two years before a bottom takes place.

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  11. So far, there is a gap up and a higher high. No real conclusions until / unless there is a clear "five waves up". Chart below.

    https://invst.ly/asaxu

    TJ

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  12. I think the biggest thing not to like about the 5 down count is that SPX/ES is the only index that doesn't have overlaps. Therefore, I'm forced to count it as abcxabc.

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    1. Are you assuming then a new high is to come?

      This move off the top has been the largest wave structure since Dec lows. That has to mean degree change.

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    2. I'm assuming that the rally from the Dec lows is complete as an abcxabc (or WXY,) and I think those Dec lows are going to be taken out. However, because of the overlaps in the DOW and NAZ/NDX, then the decline has started with a corrective wave, not an impulse wave. That doesn't limit how far down the decline will go. It just means the subdivisions will be corrective waves, not impulse waves.

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    3. You have proved yourself to be the 'worst wave counter ever', both on this site and on the OEW site. You never post a chart. You have never called a wave count correctly. Ever - that I have seen. If I'm incorrect show me the count and the call. Meanwhile, I post a completed five-down count and the market rallies 40 handles that day.

      Here is a five count down on the NQ futures, which you said above, 'couldn't be.

      https://invst.ly/asehj

      You are as incorrect as ever, and future posts might just be deleted. You are wasting a lot of our time and effort.

      TJ

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    4. I will add you were screaming like a banshee, 'triple zigzag, triple zigzag' at the top of your lungs - when there was no completed wave count to be seen on the way up to the March high. You were wrong and you showed everyone on this site that you were wrong.

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    5. First, I have never screamed a single word here or anywhere else. Screaming on the internet is indicated by the use of caps and exclamation points. You have never seen either of those used in my posts. Second, at one point in the rally, there was a triple zig-zag, however, as often occurs when counting waves, the market continued to subdivide and the count slightly changed. The nature of the wave didn't change, though. It continued to be a corrective wave. The triple zig-zag became W of a WXY. Third, as I recall, you were insisting that the decline from the Oct high was a diagonal for a very long time, but that had to change too, as the rally continued to subdivide upwards. Again, that's just the nature of counting waves. Things change. Fourth, I never mentioned the NQ futures. I referred to DOW and NAZ/NDX. Fifth, just because the market rallied today doesn't validate the 5 waves down count, as today's rally is also completely in line with the abcxabc down count

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    6. Your screaming is the much more insidious type of screaming. It shows up with words and phrases like, "completely" (above), "must be", "all indexes", "can't be" in several previous posts. It also shows up in 1) no apologies for prior past errors, 2) no acknowledgment for those who have gotten it correct or more correct than you. Yes, I thought there might be a potential diagonal downward, but I have almost always used the phrase potential diagonal here. And that's what they are. But, even above, a triple zigzag is not allowed by the rules to be a W wave. So you completely misquote everything for your own purposes.

      I told you before in the past that if you did not change your behavior that you would no longer be welcome here, and you would not be allowed to post. That time has come.

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  13. In you posted chart here, of Green Wave (iv) as a flat. Blue Wave b on a 5 min chart has 5 legs? Wave b's are normally 3 waves? Pl. explain. Thx.
    https://invst.ly/asaxu

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    1. I explained that in the second paragraph down under the chart.

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  14. Basis the SPX 500 USD (cfd) - I believe a case can be made (30min) for being in either a wave 3 or C. If in wave 3, would have est wave target area around 2870-75 for 5th wave.

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  15. GOOGL, AMZN, FB, NFLX all hit lower lows today, while the major indexes did not. Bearish imo.

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  16. Here is NASDAQ potential count on 60 minutes

    https://pbs.twimg.com/media/D6jehQMWAAAtVV8?format=jpg&name=large

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    1. Not allowed by the rules to have ((4)) higher than ((2)). Garbage post.

      TJ.

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  19. Here is the short term ES scenario as I see it. 2780 is the key. For now though I think it will bounce off es 2707 area for c of B. Then a big move down.

    30 min ES chart

    What do you think?

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    1. Garbage post. Sal, from here on out your posts are going directly to spam.

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  20. Perhaps you'll find something of value here.

    https://www.elliottwave.com/Free-Reports/Discover-5-Reliable-Setups-in-Just-26-Minutes-Free?sc_camp=6529FCDF876A4600A999959F7A1456A6&utm_source=ewi&utm_medium=emdep&utm_campaign=cr5reliable&utm_content=discover5&tcn=DiscC190512

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  21. TJ what odds would you give that this is the X wave? Is it even possible?

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  22. Im asking because of this count, anything wrong with this?
    https://i.imgur.com/B9zaqFE.png

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    1. I believe the same count is possible on iwm, spx and ndx not so good

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    2. Im doing my best but imho its really hard to find an impulse down on iwm and ndx cash maybe they are doing bigger diagonals but just so overlapping.

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    3. Erik
      Fwiw, I have a similar thought, but a bit different labeling. I see your X wave as a flat, where C is the 5 down from May peak. I have a minimum target for what would be your "Y" just above 27000 area. This is an alternate path for me. :o)

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    4. @Erik B. Yes, Erik, as far as I understand wave counting there is a an error in your count. The error is that there was a confirmed diagonal with a minor truncation at the high of the count. Price traded below the start of the diagonal in less time than the diagonal took to form, thus confirming the diagonal.

      See chart below.

      https://invst.ly/assb1

      That 'likely' means that price should not again trade higher than the diagonal or the truncation. So, what you are suggesting is, at very least, a 'low probability' scenario. Possible, I suppose, but very low probability. Further, you'd need to clarify the structure of X in any case, and not just 'throw the pasta on the wall to see if it sticks.'

      TJ

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  23. this rally is getting close to allowing for its completion via wave degree analysis

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  24. Max height for this wave should be 2,867 futures, if the count below is correct.

    https://invst.ly/ass8y

    TJ

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    1. Would like to see ES and VIX fill their Sunday gaps before the turn. And buy a bit more time as well

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    2. @C, possible if this is only a larger i of c.

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    3. I understand i of 3 must be smaller than 1. Does this just apply to to i of 3 and not iii of 3 or v of 3?

      Thank you for helping me understand.

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    4. @Gerald - it must apply to i of 3; other waves can grow by extension depending on their location, and relative lengths. I'm not willing to go into all the rules here.

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  25. Struggling to get to the upper trendline of the downward channel from the top. Will that be it or will we manage to rebound to the high's of previous wave 4?

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  26. Ending diagonal for C of 2?

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  27. If v is to remain shorter than iii in a potential ED it should end near the 38.2% retracement of 1 down -confluence around TJ number above

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  28. Dow close to breaking lower ii-iv trend line

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  29. Let’s see how long it takes to get to ii of C of potential ED
    Price behaviour

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  30. Patience ...need price behaviour to prove its done ...else could be iv of C of larger ED

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  31. The move up off the lows has so far occupied less than 25% of the time the down wave took on the YM and ES. Therefore the a-b-c off the lows may also be just Wave A (complete or nearly complete) of a larger A-B-C. Wave b was 39 ES points. If we are to witness a larger degree Wave B then, to avoid a degree violation, it must also measure at least 39 ES points (unless Wave B is a triangle).

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

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