Wednesday, December 16, 2020

Don't Worry Baby...

Well, it's official from the FED, relative to a 1% risk-free return expectation for a number of years, asset prices at an all-time-high are "a good deal". Such pronouncements make a wave analyst first shudder, and then smile.

Below is the daily chart of the Dow Jones Industrial Average futures (YM). It is counted in such a wave as to keep the waves proportional and respect degree conventions as best as I can.

Dow Futures (YM) - Daily - Wedge

I know few people will be a fan of the large minute ((b)) wave in the middle of June, but that is the way I saw the overlap, and the 'over-sized' ((b)) wave in this index that created a "running wave" that has not been fully retraced since. And, just as that Minor A wave, up, should have had that loopy B wave to "take more time" in the correction, then, so too, we think that a five month (W) wave may probably need more time that the two month correction it has had so far.

I could be incorrect. The wedge could just continue wedging. OK, but then it becomes very hard to explain the extreme compression of prices at the high. Sentiment remains rip-roaring bullish, the U.S. Dollar Index is near a low, and was counted for you as five waves down in a previous post. For those concerned regarding degree labeling, the current minute ((c)) wave of the potential current Minor B wave, is shorter than all of the prior Minor C up wave to the September high, so, it does not seem to create a degree violation in this context.

Let's see if more proportional waves begin to be generated. If so, the Intermediate (X) wave would be an expanded flat.

Have a good start to the evening.

TraderJoe

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24 comments:

  1. TimHDecember 16, 2020 at 5:43 PM

    👍 I suspect the passage of stimulus will be a sell the news event. We shall see.

    ReplyDelete
  2. GreywaverDecember 16, 2020 at 11:04 PM

    For any interested, some observations on the 10 yr yield (weekly) TNX -

    https://funkyimg.com/i/39r2P.png

    ReplyDelete
    Replies
    1. TimHDecember 17, 2020 at 8:22 AM

      👍 GW, that gap should be filled in the next 2 years. I think the fed will increase purchases if yields get to high as the govt. can’t afford high rates with the debt piling up. Not to mention other governments have negative yields.

      Delete
  3. KrasiDecember 17, 2020 at 3:57 AM

    Looks interesting, but I doubt it is the right count - it does not pass the checks.
    First cycles does not work with this count explained yesterday.
    Second crosscheck with other indexes - for example NYSE forget it B > 1,618xA
    Third quote Neely "Wave-b can NEVER take less time than wave-a in a Flat or Zigzag"

    ReplyDelete
    Replies
    1. Elliott_TraderDecember 17, 2020 at 7:07 AM

      Regarding wave b taking less time - look at Neely's own diagram of 1% b waves. He violates his own supposed rule.

      Delete
    2. Elliott_TraderDecember 17, 2020 at 7:32 AM

      And, the way that I have drawn it - within the (W) zigzag - is the only way I can find to get B longer than A in time. B is 30 bars, A is 27. Also, within (W), as drawn, minute ((b)) up is longer in time at 15 bars than minute ((a)) down - at 10 bars. So, I would not criticize this count too much. If you read my previous posts at the time I was 'the only analyst' looking for a 'longer in time' correction for the A wave.

      Further, regarding my count: I have shown you my efforts. Where are yours?

      Delete
    3. KrasiDecember 17, 2020 at 7:39 AM

      I have explained it yesterday a/Y... to be precise there is no impulses from the March low all corrective waves so only neowave patterns work.
      My goal is not to start discussion which is better so lets say this is a/Y.

      Lets make it simple most of the indices have similar patterns it is not possible that DJ has one pattern and NYSE other.

      Delete
    4. Elliott_TraderDecember 17, 2020 at 9:11 AM

      First, there is no such degree labeling as a/Y; there would be ((a))/Y or minute-a of Minor-Y; so your work must really get confused because you don't even know what symbols you are using. Second, you have held up "cycles" to me as the incredibly precise reference. Yet, you can't state if they are 14-day or 18-day. Oh! Wait. They change. Really? Third, yes, it is very possible for the Dow - which has only 30 select stocks - to look much different than the NYSE - which has over 2000 stocks. Very different. Again, until you "show your work" in real time, you are just 'flapping your gums'. Showing your work is simple: you can use Investing.com or TradingView - both of which are free - and post a link here. Until then, useless discussion.

      Delete
  4. GreywaverDecember 17, 2020 at 9:09 AM

    Pre-opening look at 4hr -

    https://funkyimg.com/i/39rrp.png

    ReplyDelete
  5. Elliott_TraderDecember 17, 2020 at 9:30 AM

    Here is a quick update on the Dollar Index. Currently the chart is showing a gap lower, and trading outside of the lower band which 'typically' occurs only about 5% of the time. The gap 'could be' an exhaustion gap, or one of them. We're looking for a real sign that the Dollar has bottomed, such as an outside key reversal, morning star reversal, or something similar.

    https://www.tradingview.com/x/n8n8HzxX/

    TJ

    ReplyDelete
    Replies
    1. Elliott_TraderDecember 17, 2020 at 9:37 AM

      ..the lower band "is 'often' where the Smart Money takes some of the profits off of the table," due to the probability of being outside of the band only 5% of the time. (Not trading or investment advice.)

      Delete
    2. Roberto MattheusDecember 17, 2020 at 1:32 PM

      What's interesting about this is gold seems to have broken out to a new leg higher. Emphasis on "seems to"

      Delete
  6. Elliott_TraderDecember 17, 2020 at 10:02 AM

    Remember this: the 'world according to Krasi': an 80 point move in the S&P500 futures contains no impulses - even when there is possibly a 1.618 wave within. Both impulse counts (the one with the triangle) and the one without provide acceptable alternation.

    https://invst.ly/t61ls

    TJ

    ReplyDelete
  7. jacksparrowDecember 17, 2020 at 10:54 AM

    Tj when you have time can you do a nasdaq count. Thks

    ReplyDelete
    Replies
    1. 6QDecember 17, 2020 at 11:38 AM

      Joe published a 4h Nasdaq count in yesterday's comments.

      Delete
    2. 6QDecember 17, 2020 at 11:43 AM

      link

      Delete
    3. jacksparrowDecember 17, 2020 at 11:45 AM

      Yea Thanks. I was wondering how does it fit with previous move is this the 3rd or some terminal move.

      Delete
    4. jacksparrowDecember 17, 2020 at 11:46 AM

      Trying to link it with apple

      Delete
  8. Bulle2004December 17, 2020 at 11:43 AM

    Could there be an impact on the S&P 500 if Tesla joins the index next Monday? The big players then have to adjust their stakes in stocks in Microsoft, Apple, Amazon, Alphabet and Facebook according to their weightings.

    ReplyDelete
  9. GreywaverDecember 17, 2020 at 11:55 AM

    Observations on daily cash -

    https://funkyimg.com/i/39rC7.png

    ReplyDelete
    Replies
    1. TimHDecember 17, 2020 at 12:41 PM

      I agree. A better buying opportunity is coming in the next 2 months.

      Delete
  10. TachyonDecember 17, 2020 at 2:05 PM

    Price clearly consolidating in a narrow range the last ten trading days. An upward break is the likely outcome imho. Another successful close above the round numbers today will for me be an important event.

    ReplyDelete
  11. GreywaverDecember 17, 2020 at 5:03 PM

    On 4hr, should the next bar close lower, we'll have an RD(3) in place, awaiting follow through.

    ReplyDelete
  12. Elliott_TraderDecember 17, 2020 at 6:07 PM

    A new post is started for the next day.

    ReplyDelete

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