Over the last couple of days, we have asked blog readers to watch for a downward break of the ES hourly trend line, a re-test, and then a follow-through failure lower. That clearly occurred this morning. Then we asked readers in the comments to watch for a break of the ES 4-Hr trend line. That also occurred today, as below.
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| ES Futures - 4 Hr - Breach of Trend Line |
The futures have tested the 78.6% level to the high, and have briefly turned away from it. The reason the title of this post is "Stuck on Stupid" is because of the drop from the most recent high, shown below.
If one bothers to count out the wave in some detail, it seems to count best as an expanding double zigzag - well, so far. Why such patterns are being made (unless they are leading to an expanding diagonal, or expanding triple zigzag) is a bit of a mystery. Why doesn't the second zigzag more closely approximate the first zigzag in time?
Further, from this morning's 09:45 am EST low, we could count five-waves up to A, and then a possible B wave down to the 62% retracement level as an Expanded Flat. So, there could easily be an up wave following this, as the expanded flat B wave is at least temporarily bullish.
If price goes over the (x) wave shown, then an expanding diagonal would not be valid. The market is truly acting like it is stuck on stupid. The retracement levels are not that deep yet, and it is possible and plausible for prices to go back over the high - perhaps in a larger zigzag on the ES 4-hr chart (..the down wave to Friday 'might' be a (b) wave, or the down wave may still be in progress).
The market is in a bit of a mish-mash from a wave counting perspective, and some new highs or lows are needed for some clarity.
Have a good start to the evening.
TraderJoe
Something to watch when trading resumes (if interested)
ReplyDeletehttps://funkyimg.com/i/38Hqa.png
Thank you for educational post, highly appreciate it!!!
ReplyDeleteES continued to hold 3600-3660 resistance level, do you still think we are in Minor B wave of Intermediate (X) wave or this can be Minor C wave of Intermediate (Y) wave?
It really, 'literally' depends on new highs or new lows. I can't pretend to see something that isn't there.
DeleteCompletion of a diagonal lower and retrace that holds the high would spell more downside. But, these are low probability patterns and 'must' prove themselves in every detail.
Since you are looking at respectable counts and ideas, how about looking at the unexpected? AKA truncated fifth? It is a sloppy count, and beyond me how I would even attempt to label the counts within the subminuette i ii iii - leading up to the chart I am posting (so I have not done so). Strong 3rd waves can truncate 5th waves, or so I hear...
ReplyDeletehttps://www.tradingview.com/x/OMehQ2aC/
No, for all the reasons I have written about in every blog (iii violates 0 - ii trend line, iii not over a parallel channel, etc., etc.).
DeleteES 30-min: after an acceptable further wave (X) or (4), there is more and more downward overlap.
ReplyDeletehttps://invst.ly/svkmt
TJ
ES 30-min, lower local low.
Deletehttps://invst.ly/svo6t
TJ
..for a true diagonal downward, wave (5) must attain 3,576.60 at minimum, and could take longer than wave (3).
DeleteTJ
ReplyDeleteFascinating price action. Apparently a rare occasion on which the protracted battle over a round number being won by the bears...will it hold into the close...? lol!
I suspect TJ's 3576.60 minimums will be exceeded with at least a test of 3500.00
ReplyDeleteES 30-minute: 'minimum' diagonal price length met.
ReplyDeletehttps://invst.ly/svpkw
TJ