Thursday, June 27, 2019

A Bit Different Today

The Russell 2000 Futures had quite the little retrace wave today (the blue arrow on the first chart). Where is the similar wave on the ES E-Mini S&P500 Index Futures?

Russell 2000 and ES E-Mini Futures - 4 Hr - Different Retrace Waves

Meanwhile, over at the E-Mini S&P500 Index Futures, it was a bit of insomnia in the after hours, I guess.

ES E-Mini S&P500 Index Futures - 15-Minutes - After Hours and Today


There was quite a whipping of prices from 2,914 to 2,936 (some 22 points), and then down to 2,917 before starting a grinding wave up of some type - either an expanding diagonal, which is potentially ominous, or a triangle (which does not look very symmetrical at this time), so the former is favored. Luckily, I was sound asleep for the first section of the chart.

Have a very good start to your evening.
TraderJoe




29 comments:

  1. My count on Gold.

    https://imgur.com/2ZyRGuN

    ReplyDelete
  2. Looks like the diagonal wave cited in the post is playing out, after the Chicago PMI came out well below 50.

    ReplyDelete
    Replies
    1. Diagonal formed the correct measurements; it's lower trend line was broken, then exceeded higher. This suggests a leading diagonal.

      Delete
    2. Do you, by any chance, have a graphic you can share?

      Delete
    3. @KS .. this is the best I can do at the moment. Perhaps the market is trying to make 62 - 78%

      https://invst.ly/b4q-3

      TJ

      Delete
    4. TJ - a leading diagonal as in wave 1 of an impulse which ultimately takes us above 2969? Is it possible for the alternative to be that this leading diagonal is wave a of an abc corrective which doesn't take us to new highs?

      Thx

      Delete
    5. maybe Russell 2000 or IWM is a clue, that's a large retrace which continued from yesterday as you pointed out

      Delete
    6. @TJ .. see my reply to KS @1:17 pm.

      Delete
    7. Smaller degree b bigger than X?

      Delete
    8. @Erik B .. triangle will be measured to it's (e) wave - if it forms properly.

      Delete
  3. Now due to overlap and degree violations, it looks like the last b is becoming a triangle.

    ReplyDelete
    Replies
    1. ET, on the futures, do you see an impulsive decline from 2940 at 12.24pm ET today?

      Delete
    2. ..just fyi - 2,935 is about the 78.6% retrace of the prior up move. And 10 - 11 candles up, and 10 candles down so far on the 15-min.

      Delete
  4. Here's an update

    https://invst.ly/b4r-r

    TJ

    ReplyDelete
    Replies
    1. Second B as a flat instead?

      Delete
    2. The afternoon pullback in the YM was greater than 90% which gives some weight to the flat scenario.

      Delete
  5. Triple top now in the DAX futures and YM to the 50% retrace level. ES not quite to the 76.4%. Looking higher still or well engineered rug pull coming up. My guess is higher.

    ReplyDelete
    Replies
    1. Best June return on the DOW since 1939. DAX and CAC continue to levitate upwards with dips quickly bought even though continental Europe is doing very poorly economically. We've had the ECB and BOJ recently promise to add more stimulus if necessary. The US Fed has also shown a willingness in the same area. Market knows this. Hard to imagine a big decline against that backdrop. My guess is Draghi is buying stocks as well as bonds. (His safe must be huge.) Xi and Trump meeting coming up. See what happens there. There's Iran too. Certainly will take something profound to knock this market over. Armstrong expecting volatility to increase in July. Remember he had July was a "panic" month. More recently he said a high in August would work well with a low in October. However all year he has been saying he doesn't see the DOW breaking out until after the January 2020 low in his economic confidence model. Perhaps a marginal higher high is not "breaking out". In any event be prepared for the trading range to likely expand in July.

      Delete
    2. Good job reading headlines! Dec of 2018 was the worst performance since 1931! So that was the opportunity to buy the headline, no? But you now assume it’s time to buy the best performance since 1939? I’m tracking 1930 rally which is very similar to this one we had since December, it was the biggest bull trap in history! The end of this year will be an awful experience for the bulls, I said that last year too when everyone was extremely bullish. The markets have no chance closing higher this year. We are in a recession.

      Delete
  6. Tim, while you maybe right that flipping of sentiment so bullish going into a potential recession sets up for an awful end of year. However, there are a couple of cycles that say otherwise, and so too the markets being driven by central bank money flows creating a melt-up rather than a melt-down. The FED are on the cusp of completing the turn from a rate hike cycle to a cutting one. In a pre-prez cycle year. And with the bull/bear cycle (a creation of my own, based on the coppock curve) turning up while above zero (thus indicative of a correction morphing into a blow-off bull phase.) Last time we saw all three of those was 1995 and 1999. I would argue that 1999 makes a better fit, though the seven year cycle says the end doesn't come till 2022. In EW terms, many services have the sideways churn the past year or so a 4th wave, which also fits the melt-up scenario (once we finally reach the breakout stage.) An interesting set-up, for sure.

    ReplyDelete
    Replies
    1. Kevin,

      We are in a 10 year bull run. The biggest run since the 1920s if I’m not mistaken? What difference does it make if the Fed cuts interest rates? They cut rates three times in 1930 and the markets dropped 40% that year...also a pre-election cycle! Ouch! The bullish sentiment is extreme right now, and I actually prefer it this way! We should see a significant selloff this year if this Depression cycle plays out. There will be no China deal anytime soon. And the biggest concern for the bulls should be the NAFTA deal which is far from a done deal. It’s in the Democrats interest to not give that victory to Trump.

      Delete
    2. Tim, what you lay out wouldn't surprise me one bit, and I'm surprised we haven't already suffered a serious day reckoning following such a prolonged bull run, especially as it was manipulated as much as it was. However, cycles, such as the Shemitah (seven year) cycle suggests a new bull began in 2017. That would suggest that central bank intervention was able to turn a major bear into a minor bear (in 2015-2016.) If so, the next bear is not slated to land till 2022/23. That leaves a lot of room for a blow-off run from here. Even if its simply a 1987 repeat, where stocks rocket up from here into the fall before reversing. From an EW perspective, there are many practitioners who believe we still have a 5th wave to come, with the prime debate whether the October thru December 2018 swoon ended the 4th wave, or was wave A (with the rally since wave B,) and thus have another big sell-wave that retests the Christmas lows in wave C. So blow-off now, or after the next major sell wave completes, before the blow-off begins. Of course, the whole pattern could be an expanding diagonal, with the current move wave E (though even that suggests a blow-off move to new highs right here.) I'm keeping an open mind on all this - following the trends as best I can - till the patterns show themselves more clearly.

      Delete
    3. When the majority of EW practitioners believe that we have a blowoff top yet to come, that makes me want to bet against that idea. All the economic data around the world is contracting.

      Delete
  7. We can't say exactly how markets will react with the Trump Xi semi-truce, but still, the potential of an all out deal being made was still there. So in that case some 3 of 3 count should probably be examined, which we may get depending on how much the market likes the result.

    ReplyDelete
  8. its not clear at all how many down and how many up

    ReplyDelete
  9. Before we delve into the outcome of the G20 meeting, it is better to step back and look at technicals. Every time there was an FOMC meeting, big or small, I have noticed that the technicals always remained intact, albeit, with the volatility that followed.

    Given that I am still sticking with the drop from highs as start of a Y of a double zig-zag, with the (a) leg completed from 2969 to 2910, (b) leg either finished on Friday or early next week, and finally a (c) wave to follow that would find newer lows below 2730. Time will tell.

    ReplyDelete
  10. A new post has been started for the next day.

    ReplyDelete