Overnight on Sunday, stock futures gapped up considerably. Shortly after the open, they traded up near the 78.6% retrace level - which is quite typical in diagonals - then reversed and started trading lower. Within minutes we said this could be counted as just an (a), (b), (c) sequence upward. The futures closed near the low of the day in some fairly negative action. The gap up, and gap fill represents this count (of a potential continuing diagonal lower) on the ES 15-minute chart.
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| ES Futures - 15 min Close - Waves Since the High |
If correct, there should be a fourth wave up, iv, and a fifth wave down, v, to make the next (a) wave in the diagonal. This scenario holds below the wave-counting-stop, shown. Once the (a) wave is in place, the 3,660 level would not be a hard level for a (b) wave.
We can not say precisely what type of diagonal this might be IF it forms properly. It might be contracting, or it might be expanding. A bit more information is needed to make that assessment. However, in either case, the count currently suggests lower daily lows are probable.
Any lower daily low would shift the daily swing line to negative. A quick review of the daily chart shows price is clearly now in "The Battle for the Line-in-the-Sand", or the 18-day SMA.
The daily slow stochastic has clearly lost it's embedded status, and momentum is pointing lower. (Not to be taken as trading or investment advice of any type).
Have an excellent start to your evening.
TraderJoe
👍 nice work TJ.
ReplyDeleteIs there any reason why the diagonal could not be an ending diagonal for C of Y? that would put today's gap up in the third wave as would be expected, and also alternate well with the exceptionally strong impulse from the pre-election lows.
ReplyDeleteThanks!
Hi Steven. C of Y is not a count. It is not correct degree symbols. You'd have to explain what you mean - which diagonal - before I could even attempt an answer.
DeleteC(Y) as an ending diagonal currently progressing. Rather than currently being in a leading diagonal after the completion of C(Y).
DeleteDepends on the index. Maybe in RUT & NQ. I think one gets into length and time problems with the ES.
DeleteThank you. I appreciate it
DeleteEarly morning look at the 30 min -
ReplyDeletehttps://funkyimg.com/i/39oTq.png
👍
DeleteHere is an updated ES 15-min chart. There was a lower low, after a triangle in the after-hours. Now there are five waves up - most likely.
ReplyDeletehttps://invst.ly/t512a
TJ
ES 30-min; outside range bar down. Probably into the ((C)) wave of the b wave lower.
Deletehttps://invst.ly/t51ob
TJ
fyi - the daily pivot points depend on which contract is referenced. The Daily PP (Classic Calculation) for the March '21 contract is at 3658.
DeleteHere is a chart update on the ES 15-min; there has been a 50% retrace on the a wave up. If the down wave goes farther, adjust the up parallel as needed.
ReplyDeletehttps://invst.ly/t52vj
TJ
ES 15-min - has now gone over the prior high.
Deletehttps://invst.ly/t545r
TJ
Classic "C" wave price action. We likely see a green VIX print into the close.
ReplyDeleteES 15-min - chart update. This is very tight, but it works as long as the high is not exceeded; hence the wave counting stop.
ReplyDeletehttps://invst.ly/t56bc
TJ
Yep! Looking for DJIA surrender of the 30K battle zone into the close for confirmation C up complete!
ReplyDeleteA new post is started for the next day.
ReplyDelete