Sunday, January 12, 2020

More Evidence for a (B) Wave

This is the second post this weekend. If you have not already read the prior post, you are encouraged to do so, now.

Ok. I get it. People are getting 'darn tired' of all this (B) wave talk. They want something else. (B) waves are trying. They are "sucker" waves designed to get people bullish at exactly the wrong time. And nobody wants to be in that "got ya" category. (B) waves seem to grind incessantly. and never end. Still I must offer what I think is additional, not incontrovertible, evidence that we are, in fact, in the Intermediate (B) wave.

The first bit of evidence comes from the Monthly Russell 2000 chart, below. If you will study this chart from the 2009 low, you will see that there are five waves up with clear alternation.

Russell 2000 Futures - Monthly - x(5) wave

Do you accept the fact that there are five-waves-up with alternation from the 2009 low on this chart? And, by measurement, do you accept the fact that wave x(5) is, indeed, the extended wave in this sequence? And, by measurement, do you also accept the fact that there has, already, been a critical overlap on the chart? In other words, IF wave (3) was actually wave (1), then there would be an overlap that prevents the Dec 2018 low from being a new wave (4) location?

Further, if wave (5) is already the extended wave in the sequence, should the impulse go on further? Don't the extended fifth waves typically end the sequence?

If you easily accept what is on the chart, then why don't you also accept that we are in a "new" wave sequence that started with a three-wave-down sequence as Intermediate (A)? Has the chart gone over the top yet? Is it even at 90%, yet? No, in both cases. Is the Russell trying to make 90%? Maybe, but it does not have to.

OK. If that is not enough evidence, let's look at your money: your real money. More specifically, let's look at the S&P500 priced in terms of real money: Gold. The weekly chart is below.

$SPX:$GOLD - Weekly - Lower Highs

This chart attempts to do what many say is required: it tries to eliminate the effect of the FED's influence in the monetary system by pricing the S&P500 in terms of real money, or Gold.

When this is done, it is very, very clear that the all time high in the real valuation for stocks was in October, 2018 - at the high of wave Intermediate (5). Since that time, there has been a series of declining highs, although a lower low would be needed to more definitively prove the case. We think that will happen.

Again, it is the effort of this site to provide the evidence for the one - most probable - case for a count. The charts above add to the evidence. And this is in addition to the evidence provided by degree labeling. It is clearly up to the nay-sayers to make their case with their evidence that is hard to discount. We await such evidence.

Have a great rest of the weekend.
TraderJoe

55 comments:

  1. TJ,
    Confirms my work. AND that makes wave 2 at the the Apr 19 high, wave 1 of 3 is the Aug low. Wave 2 of3 is the Dec high.....therefore we are in wave 3 of 3.....we gapped down on your chart to start 3 of 3 and that fits. Major Kudos to you.

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    1. Scotty, while it is facile and nice to accept kudo's, I don't think I am at all confirming your work (of which this part I don't see published here). If you are referring to $SPX:$Gold in the above count, then I don't see any 1-2-3 lower. There are still only three-waves down to Dec 24th. Most bearish I could get after that is a triangle that breaks lower. TJ.

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    2. My work is not published here. It's not just EW.....which is all you like. Best of luck.

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    3. ..but you just said 'it confirms my work." That means they are 'one and the same'. Lol. Either they are or they're not.

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    4. No they are not one and the same. I use Gann, Edwards and Macgee, cycles, EW and my own Algos. The Algos are the most reliable. EW is a nesscessary evil and after the fact has more validity....which then gives you a better idea of where you are. After 48 years in the markets it pays to have multiple disciplines to come to a conclusion. If EW was all that was needed, Bob Prechter or Neely or Sid or......would own the world.

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    5. Truly thanks for explaining the five things that you do. I really don't doubt your sincerity - it just sounds like a danger is that five things might allow any interpretation you like at the time. We know for sure cycles don't always work. And I have never seen a Gann chart that provides a incontrovertible target - like the end of wave (v) in a diagonal. I have no idea what your particular algos are, but I am always willing to learn.

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    6. Still have 3-3-3-3-3, your wave (3) I agree with, w is A of G.S.4 B is your (5) of G.S.4 elongated flat, that is why we get a 50 percent drop in a blink of an eye. Similar to 87, before March is out.

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  2. Again very interesting points,Joe thank you.

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  3. Are there still any unfilled gaps on ES from Oct or Dec lows?

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  4. ES starting the overnight +7 which could stArt the wave ((4)) upward in the intraday diagonal from Friday. An overlap at 3,276 might be an expectation.

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    1. ..overlap of 3,276 did occur: currently to 3,278. 'minimum' expectation for a wave ((4)) of a diagonal fulfilled.

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  5. General thought about wave degrees FWIW.
    If the reason (one of the reasons?) of the various wave degrees is the volume behind those movements, it seems reasonable to take into account also the fact that the same movement (or even more) in price may be caused by lesser volume.
    That is to say that maybe one must not measure too precisely to determine wave degree.

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    1. Nothing to do with volume. Never said it did. Another useless comment from you.

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  6. From the Jan 6 low appears to have completed a fourth wave Friday and now in 5 up to ath. Perfect alternation between 2 and 4 and looks clear cut to me.

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    1. Double combination more likely...

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    2. Expanding beyond the current wave, we are completing 5 up from the December low. I expect a another small move up to complete the impulse (although not necessary) and then perhaps the Wed. trade deal part 1 can begin a correction.

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    3. Didn't measure precisely, but 92ish would be the max for wave 5 under this count.

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    4. Now, perhaps, finishing with an ED, currently 3 of 5, or standard impulse still limited around 92.

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    5. Nice hourly rsi and macd divergence.

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  7. Joe you are jumping too early for your calls,after telling for ever to not jump to conclusions you start out with a preset count...

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    1. @jack .. go start your own blog instead of jumping on to just be a critic. You do nothing here. You make no calls. You show no charts. I am familiar with who you are and know your intention. I was clearly expecting up movement today. Not this much. Diagonals are waves that must prove themselves in every detail. I have said that over & over. A downward diagonal did not prove itself. It was the only downward count that had a clear invalidation, and that invalidation provides a clue as the larger count. Don't like it? Leave ..

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    2. ? My intentions what did I do,i have been following you for long time. I just saw that you are jumping ahead of yourself this time. That's all.

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  8. Although I got the direction correct today (up), from what I can see, diagonals have invalidated in the ES; and NQ has gone over the top. Will review the count later.

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  9. Just a thought. Basis cash, from Jan 6 low, could Friday's high have been B of exp flat, with selloff as C of 4? Seems to channel well this way. Not sure how this fits in with futures. Just thinking out loud.'
    Thanks

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    1. Friday's down wave was a :3, probably not a C. My guess is that Friday was an A, today is forming a B, with C of the exp. flat yet to come.

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  10. eyeryone on the internet is a master of charts thats why there here joe

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  11. I have a question. Can the first wave of an expanded flat be itself an expanded flat?

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  12. Are wave degrees rules or guideline? Is The larger wave B current count due to rules or combining guidelines with other information? Is there a rule satisfying count which places us in 3 of (3) of a first third or fifth wave off 2009 low? I am not sure if you agree that the supposed B wave is the only reconciliation of using strict wave degree rules as you have presented. Thanks joe

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    1. No. No, it is from 'count' and 'time'. For a "1" from 2009, there would need to be a 38 - 62% retracement of some type for a "2" if Cycle V were extending. The diagonal I presented could a (5) of ((5)) of V, but then you have to excuse minor 2 as being longer than two prior Intermediate degree waves, and only shorter than the third prior Intermediate wave. The latter does not seem 'impossible'. In other words, a Minor wave is shorter than the 'longest' Intermediate wave on the chart. That does not seem 'impossible' from a degree standpoint.

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  13. For whatever reason, another overlapping wedge near the end of the day. But, too few bars in a 5-min chart. 'Could' be; emphasize 'could' be a "c" wave.

    https://invst.ly/phiqg

    TJ

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  14. Counting expanded flat or combination for a fourth....

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    1. B wave of exp flat may have just completed in ES.

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    2. why do you guys like to go for expanded B without any confirmation


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  15. Hi tj, will Russel behave similar as spy and make a higher high in May?

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  16. The title of this should be "Less" evidence of a B wave.

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  17. Take some time and look at the weekly charts of:
    AAPL
    MSFT
    GOOGL
    TSLA
    BABA
    CRM
    LULU
    MA
    V
    SMH
    XLK
    XLU

    These are MAJOR STOCKS AND MAJOR SECTORS. This "B" wave is becoming laughable. The NYAD is on fire and showing no signs of letting up. TJ, You are giving us a bunch of BS now. The SPX to Gold Ratio is useless. You are not focusing on what is happening in the individual stocks. It appears you are trying to find anything to support this B wave argument. I have watched you call a potential top for a full year now. The market is up 30%. C'mon! You are smart! You are better than this.

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    1. With $SPX pushing the upper bollinger band at the daily, weekly, and monthly time frames, complacency/greed at an extreme, along with momentum locked in, regardless of the EW interpretation, probability suggests there will be better times for long entries if one is so inclined. Certainly doesn't mean new highs aren't possible but the market is very stretched.

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    2. I think Todd's sentiment is echoed currently all across FinTwit.

      Means the top for this B wave is at hand, right now.

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    3. Todd, I see your point, but I don't think anyone is implying that the individual stocks are also on a B wave, in other words, each chart on its own.

      I also thought the 1.382 X A is the max for wave Bs, but we've never had indices which are dis proportionately weighted by a hand full of stocks, which are listed above and may be working on their final impulse up.

      I'm not an EW expert, just pointing out. Maybe someone should measure the chart of an equal weighted index. Ticker RSP

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    4. @Todd .. perhaps you don't know how to read my 'Daily Projection' chart which does not 'call a top' until May of this year? This has been in the prior posts since New Years. Can you not even remember anything from one day to the next? I know you have been reading over that period. Why are you screaming at me on an Elliott Wave blog, when you offer no Elliott wave insight of your own? Change your behavior, dude, or be gone.

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  18. Todd,

    I think TJ is making an honest effort to help. I was always under the impression that a B wave could be no more than 1.382 X A. I have researched that extensively. This market is inflated beyond normal. PE Ratios, Price to book, price to GDP are all at record levels. Buffet is sitting on 150B.
    He's seen this movie before. He's patient. It will all come tumbling down when the catalyst shows up. Maybe the Chinese walk away from the table tomorrow ? By every measure it's a bubble. When you have a private group who has the ability to make ALL THE MONEY THEY WANT for free.......What do you think they are going to do ? Only they know when the music will stop. In the future when the party is over, all the EW analysts will revise their counts and you will have multiple different counts, that explain everything......just like today.

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    1. @scotty .. Mastering Elliott Wave by Glenn Neely explains on page 11-17, and Figure 11-20 what happens when the B wave is beyond 1.382 x A. It's a book which should be part of anyone's extensive research on Elliott Wave.

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  19. I think that a lot of readers confuse a blog of E.W. research and opinion with a trading or forecasting bulletin. Then, usually focused in the short term, they anger when an exposed possibility is denied by the market.

    With successes and with errors, here, the author explains his knowledge to improve the E.W. counting. So, improve the system of analysis to reduce the ambiguities and dismiss erroneous counts. The posts here have to be read calmly, so that they contain a lot of information, that without the owed attention, overlooks.

    I appreciate immensely your effort and generosity.

    Thank you ET.

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  20. A new post is started for the next day.

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  21. If Neely "Mastered" EW he would be rich beyond imagination and would not have to have subs to exist.

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    1. This same you can apply to any person that has written a book of trading or technical analysis.

      I agree with Joe. This book at its first edition contains info very interesting that improves EW theory. But not all neowave theory. Years after, Neely missed in formations very complex, a so much surreal.

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