Thursday, August 1, 2019

Lower Low Day

Yesterday, we said there were ways for prices to go lower, and we provided a target. And, at the end of yesterday afternoon, we started counting upward with the .a wave shown on yesterday's chart. Today, we showed in the comments that a .c wave did not even make the .c = .a mark. It was interrupted by another one of those tariff tweets, and it sent stock prices quickly lower. We called it a truncation.

ES E-Mini S&P500 Futures - Daily - Lower Low

As measured on the daily chart, stocks hit the lower daily Bollinger Band and bounced around it for a while. At the futures settlement, the close was below the band. So, today's move did three things.
  1. Price is pushing the lower band downward
  2. Price filled the gap shown by the black circle on the price chart
  3. Price overlapped the May high at the black arrow
When that particular futures gap opened up, we noted the rarity of gaps in the futures to persist. This one lasted a little more than a month.

Wave count attempts should be sure to be cognizant now of the overlap of the May, 2019 high. With momentum clearly to the downside, the risk has increased that we will hit the 100-day SMA shown in green. There might be some backing-and-filling, but as long as price remains below the red 18-day SMA, then the bias is to the down side.

Upward wave counts will not be in effect until a higher high day is made. Please remember that the Payroll Employment report is before the market opens tomorrow.

Have a good start to the evening.
TraderJoe

35 comments:

  1. Finally some volatility!
    First to play back what I picked up from your analysis. You believe that the momentum is now to the downside, but only until (c) of ((b)) traces out. This will then be followed by an impulse likely taking us to new highs.

    1) Do you think we have enough in micro waves to call all (cc) done? Kind of like shown here with A=C https://imgur.com/Lf7PPpY

    2) at what point does you count get invalidated and we have to conclude that ((a)) is actually a ((c)) and that the large degree B top is in?

    Thanks! Lets see what kind of moves the jobs report brings.

    ReplyDelete
    Replies
    1. 1st pp .. impulse or diagonal for ((c)) of Y.
      2nd pp .. what if it's just a larger diagonal?
      3rd pp .. expecting a daily trend line hit from the 12/24, 5/31 lows

      Will cover the rest in an update. You're making me write things more than once.

      Delete
  2. I think this is going to be a very interesting month.
    The timing of these trumps tweets is often accompanied by personal breaking news of investigations into his past. Often wonder if the tweets are a distraction to keep his personal news out of the headlines.

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  3. Fyi iwm have broken trough trendline from dec 18...

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  4. NYA also through lower trendline..

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  5. GOLD may be in a larger triangle such as this:

    https://invst.ly/bhs1m

    TJ

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  6. A potential channel in SP500 cash

    https://invst.ly/bhs47

    TJ

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    Replies
    1. Any thoughts on whether a completed i,ii,ii,iv,v would be a 3 or a more bullish (next) C?

      Delete
    2. ET, since you have not counted the entire decline down (not surprising) I thought I'd just post my count. I'm sure you'll find many things wrong with it but I thought it would be worth getting your opinion and the views of the good folks here. link - https://imgur.com/r3XDs8O

      Delete
    3. @Kevin, Art Cashin is fond of saying, "market declines rarely end on a Friday".

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    4. here is the count of the move from the low today - pretty self explanatory.
      Need a move above the p[parallel channel to get some really bullish price action going LINK - https://imgur.com/uTrxxGd

      Delete
  7. At today's low DAX futures show a 1.629 relationship between a/i down and c/iii down. Could that extend? Possible, however that could also be it for now. The 23.6% and 38.2% upward retrace of c/iii is 1.0% and 1.9% respectively from current levels. Apparently Trump will speaking at 1.45pm regarding European tariffs. Could be a market mover.

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  8. Market quite oversold. At the LODs the hourly MACD was significantly lower than anytime during last December.

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    Replies
    1. Correction … that should read "anytime during last May" where the SPX 226 points.

      Delete
  9. ... where the SPX declined 226 points.

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  10. Daily S&P 500 still below the lower bb approaching the 100ma as possible support. Slow stoch. becoming over sold. https://invst.ly/bhsp2

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  11. Here's an update on the potential channel. There is some level of downward overlap already.

    https://invst.ly/bhsu8

    TJ

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    Replies
    1. And it can’t be a 1-2 i-ii from the tweet drop if Im not mistaken

      Delete
  12. DOW, SPX & COMPQ all have the same pattern from their lows namely an abc (perhaps "A") followed by a deep retracement (perhaps "B"). Now moving up again (perhaps "C"). DOW leading and already hurdled "A". Other indices haven't got close to challenging the "A" high. So could be a triangle? DAX bumping up against a trendline. Thru that TL could be telling.

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  13. CAC futures have an interesting setup. a/i was 212 points and c/iii was 213 points. So most likely it's either an a=c situation or iii is still in progress. The index is only 24 points of its low having declined 322 points.

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  14. FXI or Shanghai may be in wave 3 down. Check this weekly HnS - https://finviz.com/quote.ashx?t=FXI&ty=c&ta=0&p=w

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  15. Here's a further update. The channel has been attacked. And a fourth wave, if it holds 'might' be a triangle, as below.

    https://invst.ly/bhtw8

    TJ

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    Replies
    1. triangle nullified - likely double zigzag

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    2. yep. Will need to see how it fits overall.

      Delete
  16. I think there is an expanded diagonal from 3:35 pm 1 min candles

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  17. Here's an expanded channel, but there are no guarantees. Some indexes met the 100-day SMA, others came close but did not. Might clean it up on Monday.

    https://invst.ly/bhudd

    TJ

    ReplyDelete
    Replies
    1. That looks good ET. I'm sure you don't mean expanding diagonal right?
      LINK - https://imgur.com/qaepu4w
      Could easily be a ABC correction from the low today, with the B wave being an expanded flat and wave c being a expanding diagonal. What do you think?

      Delete
  18. My thinking is the lows are in for now and the market will now give us a choppy and unpredictable retracement for a few days noting that the drop took about 4.5 days. Interestingly the decline towards the end of the day was marginally longer in price (but not time) on the DOW & SPX than the decline earlier in the session. So I'm viewing as the initial advance of the LODs has now been corrected. Now more upward chop and "don't fight the FIBs". European indices look absolutely appalling but a bounce has to eventuate sooner or later. SPX stopped right at the 38.2% retrace back to 2828. But perhaps the numbers that give the best clues for a relief rally are supplied by the DAX futures which has a 1.62 relationship between the 1st and 3rd waves down and the CAC futures which has performed a=c. Today's lows could still be taken out before a relief rally, and may imply or require a gap down weekend, but those relationships should be paid some attention. In summary I see 3 waves down across a host of indices and now equities need to relieve themselves of an oversold condition. Last couple of years have been really choppy and I think we are going to get the same in this correction with plenty of volatility and unpredictability. Today SPX closed lower by 0.73% whilst the VIX also closed lower (1.45%) but remains fairly elevated.

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

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