Friday, June 14, 2019

Paint Drying

If it were not for the fact that 30-handle (or thirty-point) swings in the ES E-Mini S&P Futures could add up to some real money, we would chalk up all of today's move to the proverbial "summer light" volume, and light pre-FED and contract roll-over volume, and not even try to count the intraday swings. We'd say it was like watching "paint drying".

But, some of us stay "true-to-course" and attempt to count what we see. One of those persons was Erik B., and near the end of yesterday's comments, he found a nice way to count the S&P500 cash index. I agree with his count (although not the specific degree labels). Still, you are encouraged to review it.

For my part I found the ES E-mini futures to be a little more interesting, and so I am showing that count from the high, below. From what I can see it can not be counted as Erik counted cash, but it does result in the identical implication.

ES E-Mini S&P June Futures - 30 Minutes - Whippy

What is so dramatically different about the futures - compared to cash - was the very deep b wave which does not appear in the cash market. Readers of the blog will note it caused me to immediately count the five-wave c wave up to wave (w), and that was done to the bar. After that (w) wave is a clear three-wave a wave down, and a clear three wave b wave that goes up over the top, followed by a c wave down in five-waves to end an (x) wave. Parenthetically, this (x) wave is also a flat, but that is allowed. The (x) wave may be almost 'any' three wave shape.

Then, today's pattern was, so far, another three waves up - and because of lack of downward overlap on a certain wave, this wave can still continue higher if it wants, or it could have failed here today. Only the b wave of (x) attempted to reach the 0.618 retracement on wave 1.

So, this pattern is a relatively rare pattern known as a flat-x-zigzag; it is one of the myriad combination patterns that make Elliott wave less fun and more work! The flat is from the end of 1 to (w), the (x) is where noted, and the zigzag is in progress or ended today.

Regardless of the intricacy involved, if the pattern does maintain its integrity, then it would be pointing prices downward because it would, in effect, be saying, "there is a barrier at 0.618 which was attempted to be exceeded many times, but wasn't". All-in-all, the cash market had a pretty poor lower close - again not the rollicking "leave Friday at the high".

I have done my best to see that the degree labeling is consistent. For example, you'll note that the b wave at the bottom is shorter overall than 1, down. And that's important because it preserves wave b's status as just a sub-wave. That's all there is to it. Let's not make it more than it is.

Have an excellent start to the weekend.


  1. anything yet on long term?

  2. it seems to me the bulk of chart above is correcting a 10 bar down impulse. 2 of the waves take more time in the downwards direction than the initial wave down. from a time perspective everything from right of first peak could be correcting move up from early june. the feel of the wave is more of a 4th wave down not a second wave up. i dony see this upward move from 1 down characteristic of 2nd wave psychology. its been 18 months now without much total return and in process we have 2 periods of quick corrective 3 wave declines. we had a large outside week followed by a doji. unless the pattern above plays out immediately with an accelerating third wave down (not a C wave) i dont think looking for downward counts is appropriate for me.