Wednesday, June 26, 2019

Waiting for Further Overlap

In the charts below, the Russell 2000 Futures (on the left) have already overlapped their likely minute ((a)) wave, up. We are likely still waiting on the ES E-mini S&P500 Futures (on the right).

Russell 2000 vs ES E-Mini Futures - 4 Hr - Downward Overlap

In the Russell, the overlap categorically rules out a fourth wave. If five-waves down are completed successfully, then a retrace would not be expected to go over the high. It is not 'impossible' to go over the high, but it would involve making the current wave a larger "b" wave flat, and then starting a minute ((c)) cycle to the upside again. That is a 'reasonable' alternate for those seeking such. I have it clearly listed as an alternate because I can find very little way to do that and maintain degree labeling at this time.

While the later scenario is 'possible' is gets less and less likely the longer the ES daily slow stochastic stays below the 80 level. It is getting very likely that in the short run prices will try to tag the 18-day SMA on the daily ES futures.

Have a good start to your evening.
TraderJoe

11 comments:

  1. Thanks ET. DOW cash and SPX "look" to be in a 5th wave down, SPY, ES and IWM too. YM looks best as an expanding diagonal downward. Looks can be deceiving sometimes but that's what it looks like. European indices very messy with no clear downward count which keeps me cautious.

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    1. Not at my workstation right now. No gaps from the high?

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  2. The RUT 5 waves down, either a i or a corrective ending C? Either way, suggests up from here for a while, IMHO.

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  3. looks dont mean anything. it measures to me quite differently

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    1. marc - please be sure to use the 'reply' link to respond to a comment.

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  4. Here is what the measurements tell me this morning. The diagonal fifth wave measures properly.

    https://invst.ly/b4eg5

    TJ

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  5. Seen a .30 put/call ratio on the IWM this morning! Hmm, traders betting big that the RUT will move higher. DIA put/call .77, QQQ .84. Extreme readings.

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    1. ..in the RUT, it would suggest the optimism is about a potential trade deal, since supposedly that sector is asymmetrically impacted. I don't know that for a fact.

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  6. On the 5th wave ending diagonal (cash) - are we concerned because it can no longer be fully retraced in less time than it took to build?

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    1. Was never a diagonal in ES - just a triangle. So not concerned at this time.

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

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