After the three-waves up noted yesterday in the comments section, price continued to move sideways without breaking the highs or the lows on the ES 4-Hr chart.
There are ways the correction can continue - such as a Flat, Double-Zigzag, or combination wave. Price back-tested the underside of the channel once; it can do so again if it wants. Price has not contacted the blue moving average yet (VWAP), but can do so. Yes, a full triangle is another possibility here, but they are a bit more rare than the first two types of correction. A combination with a triangle would indicate significant market weakness ahead.
So, we are patient, calm and flexible until we see more.
Have a good start to the evening.
TraderJoe
do you expect wave C under wave A?
ReplyDelete...eventually.
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TJ
ES now trading below 18-day SMA; the expectation of losing the embedded slow stochastic has been met. Can trade lower, or whip around and make an expanded flat. A triangle is no longer on the table. The double-zigzag is no longer on the table. The combination with the triangle second half is still on the table.
ReplyDeleteTJ
fyi..a couple of numbers for the overnight to help in wave counting. The S2 Pivot Level (using the Classic Calculation) is at 3,400 for all intents and purposes. The 138.2% external retrace on the up waves for the expanded flat is 3,388.
DeleteTJ
Potential "b" wave of YM is actually deeper than 1/A, so a flat is unlikely as well.
ReplyDeleteYM also overlapped Oct1 high
DeleteThe significant overnight down move never showed up in cash S&P. I'd be watching the small downward-trending channel to see if it is exceeded higher and back tested.
ReplyDeletehttps://invst.ly/sjziz
TJ
Fwiw, on 120min, break of downward RSI TL and retest. Early hint of rally to come.
ReplyDeleteThe RSI's trend lines is something very relative, because if the same period is seen in 30 minutes, the bear trend is intact.
DeleteI'm surprised there are no comments about a possible diagonal ending overnight / this morning from the past 2 weeks.
ReplyDeleteIt was also just over .382 retrace on ES/DJI/NDX, and if it turns up from the 3403 low, a deep but successful re-test of the breakout near 3425. This can easily be a B wave down within an ongoing B wave up of a larger flat from the top.
First scenario probably points to about 3500 quickly and second about 3615 at upward C= .618 * A later next week or closer to election.
We have been alreadh discussing the diagonal for sometime. But its leading..
ReplyDeleteThat was expanding. Could also be contracting, ending today, where 1-2-3 of the expanding is 1 of the contracting.
DeleteYeah i was talking abt contracting
DeleteWhich makes me thing that there is a bigger triangle in play fromn 3600 to 3200
ReplyDeleteNow a breach of the small downward channel to the upside.
ReplyDeletehttps://invst.ly/sk1p7
TJ
5 hour chart really starting to look like a series of ZZ of a developing diagonal. If true the entire structure would be and I thnk eliminate the 2nd wave count. I know a second wave cannot be ONLY a triangle but not sure if rule applies to diagonals.
ReplyDelete5 hr chart of what instrument..??
DeleteChannel back-test underway, some recent fractals also shown.
ReplyDeletehttps://invst.ly/sk34h
TJ
Also, I am in agreement that, as of this morning, cash S&P, and DJI, on the 30-minute time-frames can be counted as a contracting diagonal. SP500 shown below.
ReplyDeletehttps://www.tradingview.com/x/rPZRj0yK/
TJ
ES hourly ..second green (up) fractal back has broken upward, after channel back-test and R1 touched. Possible to count five-waves up in cash.
Deletehttps://invst.ly/sk3da
TJ
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DeleteDon't you agree that (i) counts best as an impulse?
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@ErikB, no because b of ii is longer in time than all if i, and that is a degree violation.
DeleteIs there any correlation of the wave 1 having an extended 5th that this entire B wave will have one also?
ReplyDeleteFrom my experience its always prudent to keep the count simple. Your count is so complex
DeleteFor eric
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DeleteThere is a new post started for the next day.
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