Thursday, March 26, 2020

What's It All About?

I'm going to post a chart I posted earlier. Many of you will look at the count, shake your head, and ask "why is he posting an incorrect chart?" The chart is of the U.S. Dollar Index. When I posted the chart, I specifically stated, "The longer term analysis indicates the dollar should not go over the high." That's why the A-B-C clear alternate was posted on the chart. And I said so in the comments.

DX Futures - 2 Hr - A-B-C


Clearly, the chart had the makings of the fourth wave at the point market minute ((c)) of 4. It was a perfect 38% retrace. And the EWO was in reasonable territory. Did it hold? It did not. This is what it's all about. It is about the FED spending unlimited resources (literally) to bend the Elliott waves into less recognizable patterns, or at least ones that trap the greatest number of participants into leaving their profits in the market.

Did the minute ((b)) wave make a new high for a fifth wave? It did not. Is there a clear "third of a third" on the EWO? There is not. Are there a clear five waves down from 3 to minute ((a))? There are not. It looks more like a "three" than any wave I have seen. Are there are clear five waves up to minute ((b)), so it would be a fifth wave instead? There are not.

The FED knows the only way they can help is to "bend the yardstick"; it is to "change the ruler". This chart shows clearly how they have done that. They need to lower the Dollar, not see it increase. They need to make sure that wave counters have "the most difficult time possible". And, they do it by changing the yardstick - whenever they wish. They can add and drain resources to the market unseen to the retail trader, and force the "Smart Money" to make maneuvers based on what they, with better access, can glean from the treasury market and open market operations.

Does this mean that The Eight Fold Path Method for Counting an Impulse does not work? No, it means the opposite. The Eight Fold Path Method was developed for precisely this reason. As the methods states, "1-2-3 is the same as A-B-C until it is not."

So, what does it mean for U.S. stocks? It means that while a Minor fourth wave is not invalidated yet, the odds of it occurring correctly have dropped. The parameters are pushed out to the max, making it even-odds only, or less-than even-odds, as opposed to yesterday where the odds favored the fourth wave at the location in which that wave ended.

The key lesson is this. They are playing a game against you, and they are doing it with your tax dollars and the lack of interest that they pay to retirees in their savings accounts. They do not want five-waves-down in the U.S. equity market. They don't want it because they know it will signal to most people even a greater drop ahead. True fact: they have even announced to you that they are doing this - just minus the focus on the Elliott Wave. They say they are doing it to try to increase inflation, or increase employment, or improve the economy. Whatever the faux reason - they are doing it.

I can not fight a trillion dollars. I can only try to count the waves it makes or the waves it does not make. As I have often said, "I do not make markets; I can only try to count them."

ES Futures - Daily - Wave 4 at Risk


Have a great rest of the evening.
TraderJoe


39 comments:

  1. P.S. If you were one of the first 25 viewers of this post, a second chart was added shortly after the original post. I had prepared it, but omitted it unintentionally.

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  2. Thanks ET for all the work. I do think its gonna take extra effort as we become Japan. Here is my attempt from this mornings low. Looks like extended 1st wave impulse with the shallow retrace.

    https://imgur.com/OKOYP9A

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    1. You mention Japan, and sorry to flatter but you're very sharp. Without holding you to it, can I ask your most likely long term counts, i.e. how you think it likely plays out for our index?

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  3. why dont you label your last circle as 5th. so this would put us in abc or 2 up now

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    Replies
    1. fed action can make the 5th smaller rather than changing the whole count

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    2. ..because, it is very difficult to find an impulse, diagonal or triangle that would have allowed that 5th as an impulse.

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  4. I have learned so much from reading the blog, thank you ET.

    The 2385 - 2560 area we were calling 4 on the way up - could that be a B in there instead, now already in C straight up to the .5 or .618 from the top?

    This would be unusually fast, but the size of the swings has still not settled down so it is not unreasonable.

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  5. I have this count with the C finished today. I'd appreciate any input. It caught my eye because of where my proposed 3 landed (1.618 fib) and also the end of the channel. Maybe it's horrible but I'm trying :) https://invst.ly/q93ht

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    1. ..that is the very same as the impulse count I am working on above.

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    2. ah ok thank you! i thought the 4 should go higher but the fib measurement on the retrace looks ok right now. again thanks

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  6. Quite true, and amazing that so few Elliotticians apparently recognize, much less admit what you have so eloquently stated. The banksters have been arresting impulsive declines for years, and have left many a trader looking for a fifth wave that never arrived. Eventually more traders will get wise to the subterfuge and adjust. Despite their deep pockets, I suspect they are not going to be able to print their way out of this one.

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  7. When I need a clear view of the market and I have never needed it more than now I always come here.
    Thank you so much Joe and stay safe during this period.
    Paul

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  8. As an aside, in slightly less than 5 weeks this year, the S&P 500 lost 35.4% or a little more than 1200 points. In 2007, it took almost 1 year exactly to achieve that feat. In 2000, it took a year to shed 35%.

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    1. This comment has been removed by the author.

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  10. ET from one thing to another, it would be interesting to see your long term count, what do you call 2009 bottom?
    I wonder if Corona have activated this count https://www.tradingview.com/x/TOJ2G7k7/

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  11. This chop fest overnight I have often seen as a b in a running correction.

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  12. Replies
    1. That is what I figured it was too

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    2. should be it if we are right.

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    3. If it needs one more high, I dont see a problem with and expanding ending diagonal for c. We would be in the middle of 4.

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    4. update

      https://imgur.com/KRvUc8l

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    5. presuming the wave four has ended, I am watching for today to be wrapped up in a wave 2, then a weekend gap down to be part of a third wave down. Maybe that is when the true battle will be: to see if we make a new low for 5 waves down, or if the previous low holds for bulls to try to make three waves down and thus start a up count

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  13. hi joe
    phase 5 is as long as phase 1 or phase 3?
    thank you for your advice

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  14. hi joe
    phase 5 is as long as phase 1 or phase 3?
    thank you for your advice

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  15. Now that the 4hr SPX Futures EWO oscillator is busted for 4th wave conformation, now what? I see that we still have a chart which indicates 4th wave can still occur maybe at a bit higher levels which in implies that we're putting the EWO oscillator to the side for now.

    See image: https://imgur.com/KOWcg2B

    That begs the question, how do we know when to rely on the EWO oscillator? Surely we can't pick and choose and introduce subjectivity. If we can put it aside when it's busted, how do we know that it's reliable to identify 4th waves when it's not busted?

    Stay safe!

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  16. In my opinion, this is probably the most important chart to watch to determine if the low holds or not. If bears can stay above the VIX rising trend line, bears win, if VIX falls below rising trend line bulls win.

    https://www.tradingview.com/x/onOwnCNK/

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  17. RSI is out of sync in the larger decline. There is no classic 3rd wave signature low print for RSI like in MACD and EWO. I believe this leaves the door open for an A B C count down from the ATH.

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    1. If the move down from ATH is a corrective ABC move, then doesn't that imply there is another impulse wave left to take us to new highs? This contradicts Joe's thesis as I believe he as concluded that we've reach 'THE TOP' already.

      That said, I suppose the ABC can be wave i of a larger degree diagonal wave 1. What other outs are there?

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    2. I'm thinking your 2nd option.

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  18. Good morning all. (FYI from CNBC) "House passes $2 trillion coronavirus stimulus bill, sends it to Trump".

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  19. Here is an interim post of the daily ES... currently "doing a battle at the 18-day SMA". The 18-day is at 2,574, and the ES is at 2,554 currently. Note that the upper daily Bollinger Band has crossed down through the 100-day. That's going to be formidable resistance if price gets back up there.

    https://invst.ly/q9fki

    TJ

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  20. TJ -

    Can you glean anything from charts of other indices to help formulate/confirm your SPX roadmap? Like from large caps, small caps, sectors, or inverse index ETFs.

    Thanks and have a great weekend!

    -TJ

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  21. Fwiw, FP suggests an area for 4 of 2575-2706 (basis SPXcfd), this being confluent with the .382-.500 retrace range. 2706+ area is also past (broken) support low area on 3/9. We should have some room to move higher if need be.

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  22. Turned into a regular flat correction and not a running variety. Im gonna sleep this weekend on the sidelines. Have a great weekend all and best of luck.

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    1. I think I'm seeing the same?....

      1/A wave off top: LD
      2/B wave: Flat
      First wave- expanded flat
      Second wave- ?, flat?, expanding ED
      Third wave- expanding ED

      https://www.tradingview.com/x/hoKTciLA/

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

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