ES Daily Candle: Lower High, Lower Low, Lower Close: Doji Candle (Hanging Man?)

Market Posture: Neutral and Probing Waves

Daily Swing Line: Up (Higher Low, Higher High)

Daily Bias: Up (Settle Over 18-day SMA)

Yesterday, we said a fourth wave could trade lower yet. It did. The ES found some support at 2,957 and then bounded higher - likely on the new products announcement from Apple, Inc. The DOW did make a new recovery high - possibly after a triangle formation (see second chart, below).

ES Futures - Hourly Close - Deeper Wave iv |

Here is that triangle in the cash DOW. It was proven today by the new higher high over the ((B)) wave.

DJIA Cash Index - 15 min - Triangle Wave iv |

As a reminder, triangles often precede the last wave up in a count. We should also note that, even though APPL came out with a spate of new products, so far, the Nasdaq Futures (NQ) did not make a higher high.

During the comments for yesterday, we noted that if the SP500 hourly cash prints two full candles under the hourly channel, then it is possible we had the highest high yesterday on September 9th, and are already counting down in that index (i.e. it might be slightly out-of-sync with the Dow).

The ES daily slow stochastic is over 80 for either a third or fourth day (I have seen discrepant calculations) and it embedded.

The odds remain about 50:50 between the two daily scenarios that were presented. It got increasingly harder to count a fifth wave up today in the ES futures in a nice clean manner. It's not impossible but the market has thrown a money-wrench into it on a short term basis. So, for that reason we remain flexible, calm and patient and hope you do, as well.

Have a good start to the evening.

TraderJoe

Thanks Joe. Do you have any additional commentary on the Russell 2000. Strong close. Large diagonal still look good to you? Ending diagonal, right?

ReplyDeleteTom.. I want you to back up, and put your EW sneakers on this weekly chart. The Russell is in a 50:50 state like the other indexes for this reason.

Deletehttps://invst.ly/c6qfd

There is a clear diagonal from May to August of this year - shown with the numbers ((1)) to ((5)). The problem is this: "Is it Leading, or is it Ending?" There is not a good way to tell. If it is ending, then it could be a five wave (c) wave that end a larger b wave, shown.

If it is Leading, and the high of the diagonal is not exceeded, then it could be a first wave down, i, shown on the right.

The real problem stems from the waves on the left. Unlike the other markets that made diagonals, lower, the Russell has a real honest-to-pete weekly triangle in the middle of the wave. 'Usually' in impulses, triangles are near the 'end' of the wave, not the middle. So, we have to ask, "Is the Russell really the only index to have impulsed lower?" If so, did it already make it's a-b-c up, earlier than where the diagonal takes over? The waves just before the diagonal are very tough to count as a smaller 'c' wave that matches with that 'a' wave. So, the whole correction 'may' be a, then a flat b, with the diagonal as the smaller 'c' wave of the larger b.

This count is very, very demanding at the moment, on the weekly chart. Therefore, tread lightly on the daily and intraday count until we understand more. Tariff tweets would likely affect this index a lot, so it is not to be counted in a vacuum.

Regards,

TJ

excellent post

DeleteThanks very much Joe for the detailed Russell 2000 analysis.

DeleteI appreciate you analysis by-in-large. Today is a day where you would say "I have no idea." You have two scenarios and give them a 50/50 chance which by definition, says you have no idea.

ReplyDeleteWrong. I have two ideas that allow me to be flexible, and to act accordingly in my own accounts, depending on wave development. As I clearly showed with my correct call of an 'x' wave near today's lows, it is 'not' a problem with the counting of waves. I clearly did that - counted waves correctly - in both the down direction yesterday and today, and the up direction beginning in late afternoon - in real time and in public. There are only a few on here that can do this, or that demonstrate they can do this on-the-fly.

DeleteNo, this problem is with the way that the market is currently set up. It is set up such that a small bending of the yard-stick (meaning the dollar, by interest rate reductions) could as well put the market over the top. I can not predict a Mario Draghi (soon to be Christine LeGarde) as he/she is not an Elliott Wave. I can not predict a Jerome Powell as he is not an Elliott Wave. And, I can not predict a tariff tweet as that is not an Elliott Wave either, and the tweeter is not even rational.

Clearly I have a sufficient idea such that if incorrect, I won't be incorrect for long (in terms of daily and weekly timeframes).

Full moon Friday 13th. Will it play into timing?

ReplyDeleteRight, the bounce off of today's low cannot be counted as a 1-2, i-ii and then launching into a iii because i-ii was longer in time and larger in price. So to attempt to count 5 up, you would need to count it is a potential expanding diagonal. Am I thinking about this correctly? I think so.

ReplyDeletePlus, elipsed eclipsed 61.8% of the previous 5 down and rebounded to previous 4th. So majority of guidelines & clues so far point to a corrective wave.

DeleteThe next event of interest is actually the ECB on Thurs morning. With the strength of the DAX and Nikkei it looks like they're trying to frontrun news of more easing. That might blow up the near term bear counts even before the Fed or China meeting. Both are stretched to 78-88% retracements.

ReplyDeleteBefore the open: Here's what I have from the overnight waves. The first 'a' wave is an Expanding Leading Diagonal of the 5:3:5:3:5 form. Then, there is a 'b' wave or part of a 'b' wave triangle. If there is a 'c' wave up to a higher recovery high, then a diagonal might be forming, overall for a fifth wave.

ReplyDeletehttps://invst.ly/c6zw0

TJ

There is now downward overlap on 'a' which can legitimize a 'b' triangle.

Deletehttps://invst.ly/c6z-1

TJ

Note that within 'a', ((5)) > ((3)) > ((1)), and within the 'b' wave triangle ((B)) is a near exact 1.618 exterior retrace on ((A)), which is the typical case in a running triangle.

Delete..with the marginal lower local low; then larger triangle or 'b' as a flat.

Delete..there's an equal high; let's see if the 'a' wave gets overlapped again.

Deletehttps://invst.ly/c6-lo

TJ

SP500, cash, there's the new higher high; likely a, b flat, c, not a triangle, and may be in a larger diagonal. This would be wave ((1)) of a diagonal fifth wave.

DeleteET to avoid degree problems I believe this new high have to be 3 of (C) as a bigger degree diagonal, maybe im wrong..

Deletehttps://invst.ly/c7194

Deletehttps://invst.ly/c71af I think it's possible to count abc up?

Delete@Erik .. very difficult to count yesterday's "five down" as a zigzag.

DeleteAgree, here's best I can do, blue = zz, green= double zz

Deletehttps://invst.ly/c71nw

DeleteYesterday's SP cash was a conventional 5 waves down without overlap.

DeleteI should have said across the 9th and into the 10th of Sep.

DeleteGold to me still needs some type of c in a correction from mid friday.

ReplyDeleteCould gold be in some type of running correction with today's weak move up part (or all) of that c wave?

DeleteAAPL over 220.53. Busted the 5 wave down bear count..

ReplyDeleteHi C! .. lol .. don't you think a pattern like this on AAPL stock should give someone some pause?

Deletehttps://invst.ly/c72cm

TJ

Yes that's the next best alternative. Provided everything stays below 229.9 (quietly chuckles to self)

DeleteThe new high in DJIA yesterday in my opinion indicated that SPX would play catch-up as that is the usual outcome with the kind of price action we have been seeing and an intact short term uptrend. If the pattern is what I think it is, marginal new highs are just ahead. Counting a second wave here seems to me to violate the "right look" guideline. Just one man's humble opinion.

ReplyDelete60 min es shows a new megaphone pattern ....topping soon

ReplyDeleteJoe....looks like another clue for a st high

ReplyDeleteEggs-ceptionally close to c = a, depending on which bottom you use.

ReplyDeletehttps://invst.ly/c730j

TJ

If yesterday's low was iv, shouldn't we be looking for a 5 here instead of an abc? It looks like we could be in an impulse here for v, fourth wave in progess or just completed.

DeleteHere is the usual triangle target on the Dow; widest width of the triangle added to the breakout point.

ReplyDeletehttps://invst.ly/c73po

TJ

Closely matches the expected target based on distance of prior trading range.

DeleteAnother marginal ES higher high.

ReplyDeleteDOW has the higher high, toward the triangle target, and now a downward overlap.

DeleteES futures also overlapping downward.

DeleteEnding diagonal into close? 4 shorter than 2

DeleteA new post has been started for the next day.

ReplyDelete