In the prior post, we said that "there were ways this (v)th wave could extend", and we could easily see a "pop over the top" of a potential diagonal to provide a better look. We provided the clear invalidation point of 3,420.25 for a potential diagonal in progress. And, we stated, diagonals are patterns that must be proven by meeting all of the measuring requirements. As of 07:00 am this morning, a potential diagonal pattern did invalidate. Therefore, we expect the next best pattern that explains the enormous number of overlaps is this running triangle, shown below on the 4-Hr chart of the ES E-Mini Futures.
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| Es Futures - 4 Hr - Running Triangle |
We have also written before that "diagonals and triangles are cousin patterns because their three-wave components can sometimes be used to explain either". That appears to be the case this time. We have a hard time seeing this amount of overlap and time consumption from wave (iii) being anything other than a triangle. This morning's move, then, is likely the "thrust" from the triangle.
Traveling under 3,340 or the prior 'c' wave would be the first step in confirmation that a downward wave is more likely under way.
Update as of 08:45 EDT. For those interested in the thrust out of the triangle on the shorter term, here is the ES 30-min futures. A countable top is still not in place. However, based on the 0 - ii trend line, then wave iii should not become longer than wave i, as its retrace is much less than 38.2%.
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| ES Futures - 30 Min - Still counting (v) |
Most likely, wave iv will try to break the 0 - ii trend line.
Have a good start to the day and the week.
TraderJoe
ET, your post on August 9 "Degree Labeling Lesson on AAPL" was very informative for a number of reasons. Because of its heavy proportional weight in the capitalization indices, as AAPL goes, so goes the rest of the market imo. The AAPL weekly expanding diagonal is a chart masterpiece. If the weekly expanding diagonal is correct, what comes next could be breath taking.
ReplyDeleteIf the pattern is correct, does AAPL go back to the lower trend line on that chart?
Delete@izard .. the 200 week moving average suggests that is possible. See lower MA on chart. But the price has to get down to the 40 week first.
Deletehttps://www.tradingview.com/x/fVfRljN1/
With the stock about to split 4:1, the pattern will get very compressed, and might be difficult to tell.
TJ
Thank you TJ. I will keep the chart you shared as a reference.
DeleteGold did this to me weeks back as well and was added to my book of F%$k ups, "contracting diagonals can be running triangles with long b waves"
ReplyDeleteOn the daily, ES is turning to the right and the EWO looks really weak, whaterver the count.
Don't be too hard on yourself. It's what I have referred to in the past as the "Fourth Wave Conundrum". It's what happens when a down move starts with only three-waves down. And it happens at every degree of trend.
DeleteAn additional shorter term chart was added to the main post above.
ReplyDeleteTJ
The current 0 - ii trend line has broken lower.
Delete..now have 38%+ on wave iii.
Delete...down wave reached nearly 50% of wave iii. 'Possible' triangle fourth wave building based on the whip-arounds.
DeleteHere's a chart update ...pattern could take us into a Tuesday reversal?
ReplyDeletehttps://www.tradingview.com/x/glJH5wpi/
TJ
great Update TJ... but how does this triangle fits in the bigger picture?
DeleteKAVI
This morning seems like it must have been the 4 in AAPL from August 12, so it seems to make sense so far.
Delete@KAVI, still the same 'bigger picture'. Triangle is likely minuet (iv) of the minute ((c)) wave of the Minor 3 wave.
Deletehttps://www.tradingview.com/x/VBPovLi4/
TJ
ok, thanks TJ... so this is a leading diagonal A wave... b
Deletedo you expect a deep pullback for the B wave?
thanks
KAVI
@KAVI, (B) waves don't have to. But, they can. Let's see if we get a Minor 4, first, and not put the cart before the horse.
DeleteIf we're looking at a poss ext 1st wave, 5 waves up, the 4th retrace is pretty deep. We've lost the contracting "wedge" appearance currently. Fwiw
ReplyDeleteThe daily chart still looks "OK".
Deletehttps://www.tradingview.com/x/VBPovLi4/
TJ
TSLA broke the channel from Aug 12 this morning, touched the lower line on the rebound just past the .618 retrace.
ReplyDeleteA different perspective. (updated)
ReplyDeletehttps://imgur.com/VLCVgR0
There is a new post started for the next day.
ReplyDeleteThe trend is your friend until the end. Happy labeling....
ReplyDelete