Friday, March 27, 2020

The Battle at the 18-Day

The U.S. Dollar was down today - nearly a full cent, as the FED pumps to try to turn the contraction around. GOLD was down. Crude Oil was down, and - even with this - stocks were down. Did I mention the U.S. Dollar was down?!

The daily chart of the ES Futures is below. Price initially waged a battle at the 18-day SMA, mostly in the after hours, and then price settled below that line - leaving the market with a negative bias.

ES Futures - Daily - Tag of 18-Day SMA

This increases the probability somewhat that a Minor 4th wave (non-overlapping) might be made as part of an impulse wave downward.

You'll also note that the upper daily Bollinger Band is about to cross under the 100-day SMA. If price should rebound at some point, that level would likely offer formidable resistance to further upward movement. We are not there, yet.

From the slow stochastic, we see that it became un-embedded from being under the 20 level for three or more days, and when that occurred, price and the 18-day SMA tried to come together. That was the expectation, and it has been met. You will also note that the slow stochastic is no longer in over-sold territory. It has effectively worked off the old-sold condition.

Wave 5, lower, if it occurs, may not be easy to figure out. It might be a diagonal, or it might be an impulse, or it might be an impulse with a diagonal in its fifth wave. So, we'll do our best as the wave progresses to monitor for a new low.

The stimulus bill was passed today, pretty much as expected. And yet, this is how the market reacted. Oh, and did I mention, the U.S. Dollar was lower.

Have a good start to the evening and the weekend.
TraderJoe

30 comments:

  1. Hi, Joe,

    Thanks for the update. I have a simple question: if we do get a fifth wave down, would that complete the big C down for the irregular ABC correction for 5 wave up from 2009 to 2018?

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    1. Please re-read the second paragraph under the chart.

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    2. Joe I don't see anything in the paragraph you reference that answers Redclouds question ?

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    3. @Redc, @scotty, @Smile: Red is arguing for a "5th wave up". The resistance of the daily Bollinger Bands and 100-day SMA is arguing for something different.

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    4. @ET, my question is that if we do get a fifth wave down, would that complete the C wave down for the correction that started in Oct. 2018? (A down to Dec. 2018, B up to Feb. 2020, now we are in C down). Thanks!

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    5. @Red; it's the same 'question'; notice the term 'correction' (down).

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  2. Thanks joe. Very very good guidance as of late.

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  3. Call me nuts, but I am seeing more and more examples of very convincing b waves that at least 1.618 and even 2.618 of their a waves.

    Here is today. https://imgur.com/SCsJtoG

    The move after what would be the LD in 1. https://imgur.com/XCSKTuM

    Here is one in gold. https://imgur.com/pyb4gru

    I think they happen way more than EWI wants to believe.

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    1. Hate B waves, extended B waves have cost me a lot of money over the years. Sometimes they extend so much that many will call it a wave 5 impulse up. Too much variability.

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  4. ET, do you use EW on $XVG? https://stockcharts.com/h-sc/ui?s=%24XVG&p=W&yr=3&mn=0&dy=0&id=p75030147591&a=436084864

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    1. ..it's not trade-able. It's a calculation only.

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    2. Your crude oil analysis from 2018 was spot on and wave 5 of your elliot wave assessment was perfect. Can you do a similar analysis for what will happen next in the oil market?

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  5. Peak oil at 147, peak storage at 20. I believe ET had this as 3 of a contracting ending diagonal within C from 147. A great call.

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  6. ES is very messy but I might speculate some sort of leading expanding diagonal off the top?

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  7. Good morning all. This is all I see at the moment in the ES intraday.

    https://invst.ly/qaap1

    TJ

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    1. IFF, we are making a short term diagonal (1-min), then max is about 2,610

      https://invst.ly/qabah

      TJ

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    2. ..and such a thing 'could' fail. So be on the look-out.

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    3. ..looks like a failure or a c wave of a flat.

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    4. short term break-down .. https://invst.ly/qabhe

      TJ

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    5. ..upward options .. triangle or flat..; downward option: completed diagonal at 13:00, and expanding diagonal, lower.

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    6. (fyi) .. the downward wave to 13:30 is longer in price than the downward wave to 12:00 so that would seem to rule out a continuing diagonal.

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    7. ..triangle has broken down; this leaves only a 'flat' for higher; or lower in terms of EW patterns.

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    8. Five-waves up to a new higher high ..after a flat wave .. lower.

      https://invst.ly/qac5j

      TJ

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    9. This C wave up just hit the 90% level of previous high 2632 to possibly complete (B) up so we should see a (C) wave down to complete the flat? Is this the flat for lower as mentioned above?

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  8. wave 4 pretty much ruled out at this point?

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  9. So far, ((C)) = ((A)), and within ((C)) 5 = 1.

    https://invst.ly/qack0

    TJ

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  10. Another post has been started for the next day.

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