Friday, July 31, 2020

Intraday versus Daily

Today went precisely as expected to the end of the day. If you read the prior post's comments, you'll see that we counted a leading expanding diagonal downward, which filled the open overnight futures gap, followed by a ((B)) wave which undercut the low to the 1.382 external retracement. That wave bounced off the 18-day SMA and the S1 daily pivot support and we started counting five-waves-up and three-down to the 62% retracement in real time. We drew the potential ((C)) wave up, and price closed at 2.62 x the ((A)) wave up. That chart is below.

ES Futures - 15-min - Diagonal & Retrace?


Unfortunately, due to the nearness to the high, and the expectation that - if today was 'window dressing day' - Monday could see more inflows and go over the top. If it does, we are showing the simple alternate labels below. The leading diagonal would have to be a, the three-wave up wave would have to be b, and the wave down to noon would have to be c.

The other thing that is unfortunate is that this pattern does not work on S&P500 cash. That index exceeded yesterday's high. While the S&P500 could go over the high again, as could the daily ES futures, the only pattern we can find that does not violate degree labels at this time is this one.

S&P500 Cash Index - Daily - Five Waves Up?

It's been a real bear of a count, but the three-wave internal structure should give 'pause'. It could be an ending diagonal. It could also be Leading.

Have a good start to the weekend.
TraderJoe

22 comments:

  1. If it's leading diagonal then it's possibly not just A but 1 requiring a revisit of the longer term count
    If it's ending diagonal then if it's a failure and needs you to revisit long term count? All of a sudden having 5 waves in this direction must open up more uncertainty?

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    1. Not if the lD was for a 5 wave of C

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    2. @jack .. If the diagonal portion is five-waves for a C portion, then ((ii)) of such a diagonal is longer than B and that violates degree principles, which is why I said this is the only one I can find that meets degree labeling requirements. Also, you need to be less cryptic and short in your comments - take more effort with them. You have reasonable thoughts but your brevity allows them to be misinterpreted.

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    3. @marc - 'usually' ending diagonals occur with all three of the numbered waves 'over' the prior high (the Jan-Feb '20 high in this case) to show their motive character, so I think this one is leading. More often, leading diagonals are "A" waves, not one waves. They 'could' be 1 waves, but they are 'more often' "A" waves. We'll see how deep any retrace goes. I was thinking the (A) wave is the non-vaccine FED & stimulus-driven wave. And perhaps the (C) wave will be the vaccine driven recovery wave. If Primary [A] is at the lower left, I expect Primary [B], up, might 'take more time' than it's prior Intermediate wave up, since Primary is at a higher degree than Intermediate. I would also be OK for Primary [B] to make a higher high than the prior Intermediate (B) wave up. According to TradingView's figures, the cash index has gotten to the 3,270 level - which is the 90% level - which is the 'rule' for the minimum of a three-wave Primary [B] wave of a compound flat. So, this wave is, by measurement now, expressing it's character as a [B] wave.

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    4. sorry I don't have the ability to post chart but i have ld ending where your 3 ends (all 5 waves) then triangle then 3 and 4 avoids overlap with ld and then 5 to make a low on Friday. Using smaller tf.

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    5. Where 3 of your ld ends ia where my ld ends

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    6. Joe
      My understanding is that LD's are 5-3,5-3,5-3 structures and only ED'S are 3-3-3' structures. Maybe I am wrong but can you please elaborate?

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    7. @fiboplayer .. you are incorrect. Please see The Elliott Wave Principle by Frost & Prechter. Leading diagonals may 'either' be 5-3-5-3-5 or 3-3-3-3-3 and therein lies the consternation.

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    8. Joe- Dont want to argue BUT
      Frost and Prechter write,

      "The structure of this formation fits the spirit of the Wave Principle in that the five-wave subdivisions of the actionary waves communicate a 'continuation' message as opposed to the 'termination' implication of the three-wave subdivisions in the actionary waves of the ending diagonal."
      About identification, they go on to write,

      "The main key to recognizing this pattern is the decided slowing of price change in the fifth subwave relative to the third. By contrast, in developing first and second waves, short term speed typically increases, and breath (i.e., the number of stocks or subindexes participating) often expands."

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    9. They now have 3 editions of EWP- Not sure if I have the same as yours or vice versa.

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    10. From the guidelines section of the current 'on-line edition'. Section 2.5

      "Waves 1, 3 and 5 of a leading diagonal usually subdivide into zigzags but sometimes appear to be impulses."

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  2. "the three-wave internal structure should give 'pause'" - this can also count as a Primary [X]?

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    1. yes! but, then, as a Primary wave, it will not have taken more 'time' than it's Intermediate (B) wave. So that is a caution flag on the [X] wave count.

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    2. Yes a zigzag by nature is a 5-3 structure and not 3-3. To further expound on this- LD isn't even an original idea of Elliot himself and never was published in his original work.
      Its just something Frost and Prechter have "observed".
      Thanks for all you do here.

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  3. I will also add, that, if the structure is a true leading diagonal, then the 5th wave is not allowed to fail. IF it fails (and the upper daily Bollinger Band still has plenty of room for it 'not' to fail), then it simply can not be a leading diagonal, and must be a different structure, either Primary [X] or still in Minor B of (X), down.

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  4. If a ended on april 19 (with its 5th wave being a short LD) then 2 would be shorter than b. I suspect we are closer to the end of this whole B wave, than to barely the middle, as you are implying, if A has not even ended yet. I wonder if degrees are more like guidelines than rules, and they do not always have to work. i have done a little research and have found examples where subwaves of a 3 were longer than all of 1, and to count otherwise would require a lot of twisting to fit a count in. I like the idea of degrees, as EW without it has too many limitations, but I do not think they are inviolate.

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    1. ..please check something for me. While you have found a way to try to accommodate 'time' in your view, if the A wave ended where you say on 4/19 - which is a Sunday - isn't the down wave into the middle of June longer in 'price'? So, I don't think you have found a way to accommodate both. Either way let me know, and correct me if I'm wrong.

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    2. That should have read 4/17, not 4/19, apologies. You are correct, i cannot see a way to fix both price and time, with price being the bigger problem. Btw, do you see degrees as inviolate, or as guidelines? It is a critical question i think?

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    3. @JG .. find me something that violates degrees and I'll have a look at it.

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  5. TJ - what is your view as to which gives a truer "count"; (and why)
    1. SPX - weighted
    2. SPX - unweighted
    Thanks

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    1. ..only what can be traded. So, neither. These are just mathematical calculations.

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  6. A new post is started for the next day; it is a detailed look at the NQ 100 futures.

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