Tuesday, June 25, 2019

A Happy Day

Today is one of those particularly gratifying days. That is because it is not only are some wave counts working out as they should - as I see them - they are also beginning to work out in the eyes of others! I can not tell you how pleasing this is. Let me explain.

Yesterday, reader marc, who is a regular contributor here asked me what the count in futures might be versus cash. This is a very astute question to begin with. It shows that someone has their thinking cap on. So I sketched out the potential expanding leading diagonal, lower on the ES 15-minute chart, but I clearly stated that a lower low was needed to attain a fifth wave lower. And regular readers of this site know that the fifth wave must be longer than the third wave.

So, even as I was putting together the contracting diagonal on cash, shown in yesterday's post, marc commented that (paraphrase) "maybe the contracting diagonal will finish in the overnight session to align with cash", and then we expected a retrace. Here is the chart.

ES E-Mini S&P500 Futures - 15 Min - Complete Expanding Diagonal

Downward price movement now has been from 2,970 to 2,942 - some 28 points. And look at what happened in last night's overnight action. From the a wave of ((5)), the market shot up about 9 points in the overnight to make the b wave, and then collapsed into the c wave of ((5)) all before midnight.

And not a lick of those price movements is seen in the cash market. But, now we do have a completed and perfectly valid five-wave sequence lower that not only adhered incredibly well to its trend lines, but also meets all degree criteria. The first sub-wave a of ((5)) is shorter than ((3)), and that is what helps maintain the degree-related criteria.

Even so, the market this morning made a new lower low proving out the status of the pattern as a Leading Expanding Diagonal. So, the post-pattern prediction is actualized!

And what is gratifying is this: given the same rules related to patterns and degree two different Elliott analysts can reach exactly the same conclusions. That is what my work is about: trying to help readers see that without necessarily doing all the work for them.

In the case of Elliott Wave, it is by doing that you will hone your skills. And, the simplest overall rule that one needs to employ is the same one that Sherlock Holmes did, "when you have eliminated the impossible, then what ever remains - regardless of how improbable - must, in fact, be the case".

Now, it's not all that bad in Elliott Wave work, as many of the patterns you will see here are not at all improbable. In fact, they are much more probable. I hope you get to see more examples.

Have a good start to the day.
TraderJoe

47 comments:

  1. Thanks, Joe. I suspect it will be a long time before I can contribute to the conversation, but yesterday is the first time I counted a "difficult" diagonal that I didn't have to erase everything on my chart and start over after your evening post. I was only off on the location of a and b of the 3rd wave (cash).

    So what you're doing has an impact and I appreciate it.

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  2. bigger diagonal downward? i also can see impulse buried within working on iii of 3 if not done

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  3. This does look correct, so far. Would be great to see the EWO above the zero line for a second wave.

    https://invst.ly/b3mwm

    TJ

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  4. Maybe just a standard 5 waves off the top on cash. And action from open to noon was iv.

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  5. joe i believe move down is bigger than B

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  6. Here is a 15-min chart for more perspective. Looks to me as if the down move wave the b wave of a flat, and the overlap tends to confirm it - even if it fails. Because the up move is larger than previous up moves, it should be of a same degree as new "a", and larger degree than previous .a or .b in blue.

    https://invst.ly/b3o56

    TJ

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    Replies
    1. b looks big enough to complete a ii if this nosedives - does it have time limitation -

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    2. Looks like the flat idea for wave ii didn't work out and looks like we are creating an impulse down from 1.35pm EST at 2933. Would it possible for you to indicate how the decline you've shown from 2964 to approx 2930 to be a an impulse (i). I'm curious as to what the internals are. Thank you.

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    3. I'm sorry, I just saw your post 11:45 AM

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  7. Some are looking at this move down as a iv from the move starting at 2866. What is interesting about that is today's low was the 38.2% retrace of such a move. It would imply an expanded flat for the iv with the b wave at the ATH. However very hard to see 5 down for c of iv at the LOD.

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    Replies
    1. To clarify, 2866 was AH on the cash continuous contract. ES September contract was 2871.50. Whatever the case the market needs to pull its socks up soon or we are looking at even lower lows near term.

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    2. Lokks like lower still.
      European perspective.
      https://imgur.com/TtvuF7d
      https://imgur.com/QxS9RVc

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  8. 3 would have completed on 6/20 near open
    thus 5 would fall short of 3000

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  9. ..just fyi - the Russell futures did not have a new low where the ES made it's low at 13:00 ET.

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  10. The ES daily slow stochastic has become un-embedded; at least for now.

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    Replies
    1. ... "even if it fails"... I think the failures and truncations will be hardest for most to deal with on the way down. They tend to destroy counting confidence.

      https://invst.ly/b3osb

      TJ

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    2. Hi TJ, Can you explain how this is a flat for wave 2? Wave c doesn't seem to have a 5 waves?
      https://ibb.co/pXZtxYR

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    3. ..and it 'may' count best as w-x-y

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  11. If ES 2931 is exceeded higher, before a new low, it's possible the 14:30 ET low is a "B" wave. It's at 1.382.

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    Replies
    1. ..just that the EWO has no divergence.

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    2. Let's hope that's the case 'cause the other count is so bearish its hard to imagine!

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  12. yes joe
    we saw failures on evreytime frame on way up from 2009 - we have to allow for same when we count down

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  13. joe, still drw the 0-2 TL even though it goes through wave 1 - correct?

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  14. Here's a current 'fractal' snapshot; watch 'em closely.

    https://invst.ly/b3p7c

    TJ

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    Replies
    1. ES new LOD; can be a third wave down.

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    2. ..now the overlap of importance is ES 2,936.00 below that can be a fourth and fifth wave. Other options will be explored later tonight, but the market is still counting lower.

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  15. As far as I can tell, we have exceeded the maximum depth of the minute ((b)) wave, and have therefore "turned a degree".

    https://invst.ly/b3po6

    TJ

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  16. Hi joe, do you have an elliottwave count for bitcoin

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    Replies
    1. 2017 top 1/A, 2018 btm 2/B. There are insufficient waves to claim an impulse, and the 2018 btm from a degree perspective is "the longest correction in time". Other than that, I really don't have an interest in crypto.

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  17. Is it possible, that from small 1-2 Friday 11:05am-3:45pm, it has since been in extended 3 which may have mostly finished (fifth of this 3) with a diagonal? Today's opening gap would be the middle of 3.

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    Replies
    1. Extrapolating, if it plays out --> 4 / 5 into Thursday low = 4 days total, wave 2 upward correction into July 4.

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    2. I addressed a third wave of some type at 3:49 pm, yesterday. There is no doubt in the futures there is a 1.618 wave lower.

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  18. Nothing wrong with seeing the waves in a channel count. Because y is < iii, the sub-waves of iv seem to work. Wave ((4) would be at the prior wave iv. Count does not work in the Dow.

    https://invst.ly/b3zqu

    TJ

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    Replies
    1. ..sorry meant to say count does not work in the Dow futures due to overlap.

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    2. circle 4 needs more time

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  19. working on a 4th wave, or complex 2nd wave
    using time to build possible triangle/compression

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  20. Cash S&P500 has closed the opening gap, and made more than 90% of this morning's up wave.

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    Replies
    1. Russell cash has a new low according to Investing.com data

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    2. The Russell cash has clear overlap on ((a)), up, after a 0.618 wave which is most probably the ((c)) wave, up. Chart below.

      https://invst.ly/b41h3

      TJ

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  21. S&P500 cash; new lower low. than yesterday,

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    Replies
    1. ES futures now have a new lower low than the over-night low.

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

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