The ES 2-day wedge count remains the primary count until we see something that does not fit.
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| ES Futures - 2 Day - Count |
In previous posts we have shown how all degree labels 'fit like a glove', down to the most recent Minor B wave and how it remains shorter in both price and time than all of the Intermediate (X) wave - it's most recent higher degree down wave. Now the question remains whether or not a downward wave will overlap the Intermediate (W) wave (at the yellow dotted lines). If it does, then there is a slight possibility the waves can be numbered as (1) through (5) instead of (W) through (Z).
According to measurement calculations a 100% x (X) down wave can still overlap at 3,570 with room to spare on the (W) top of 3,587; again this is if the wave intends to make a contracting diagonal. But, this measurement is to the A wave of (X), not the C wave of (X). If measured from the C wave of (X), then downward overlap with a shorter wave than (X) simply can not happen in the ES.
However, in the Dow futures, there is 'currently' nothing preventing downward overlap with a less than 100% wave from the C wave in it's (X) wave, as Illustrated below in the potential alternate.
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| Dow (YM) Futures - 2 Day - Plausible Alternate Diagonal |
The issue with this alternate as a diagonal is that it does not 'look' very contracting. It simply has less of the 'right look'. Such a pattern would also clearly invalidate below 28,806. And so, this leads me to think another plausible pattern is that the Intermediate (X) wave is not over yet, and might look like this.
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| Dow (YM) Futures - 2 Day - Plausible Channel Alternate |
This construction might allow the Primary ((B)) wave to extend further in time, and still allow for a roughly 25% 'bear market' if interest rates rise. In this case, relative to degree labeling, Minor B-3 is still shorter in time and price than the larger Intermediate (W) wave, and the C-5 wave, down, would be shorter than all of Intermediate (C) to the 23 March 2020, low. In this count, clearly the Minor A-3 wave down can be allowed from a 'price' standpoint. The issue is whether it can be allowed from a 'time' standpoint. More work remains on that point, so stay tuned.
Have an excellent rest of the weekend.
TraderJoe
Thanks for the insights!
ReplyDeleteSPX equal weighted index (for top 5 weighted stocks) if interested -
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DJI (wkly) -
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Morning look 30min/4hr NQ -
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RE: 30min. 1st RD hidden was low close of move. 2nd was above low close, suggesting part of a 2nd, 4th, B, or X wave of some degree I believe.
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DeleteGood morning all. On the ES 4-Hr, the EMA-34 indicates the up move is 'sufficient' for a fourth wave, iv, of a contracting diagonal. It can move up higher, but should not get much beyond 78% of wave ii or it will lose 'the right look' for the wave.
ReplyDeletehttps://www.tradingview.com/x/KrZ8UGha/
TJ
ES 15-min; we don't know 'the first of the month' money is done yet, but this last bit can be viewed as the 'thrust from a triangle', shown below.
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TJ
TJ, if the current wave is x2 instead of iv it could get up to 1,618 of y? Right?
DeleteJust fyi - 3,890 is the 18-day SMA, the 'line in the sand' on the daily chart. And 3,890 is the R2 daily pivot on the Intraday (ES 30-min) wave counting screen. If there's going to be a reaction it might be in this neighborhood. This is also about 81% x wave ii in contracting diagonal.
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NQ 30min update -
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Tj
ReplyDeleteIts a very strong broad based rally today. Is there a possibility that on Daily,Friday low was wave 2 and now up in 3rd.
Here is the ES 30-min intraday screen. There have been five candle closes outside of the upper band. That lowers the odds of closing outside of the upper band again to about 0-1% (not impossible, just very low odds),
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Also note, there have been 'no' upwards fractals form since the high of the likely triangle - shown earlier - broke upward this morning.
TJ
ES 30-min; doji candle closing inside the band; resets the number of consecutive closes. Right now the doji is 'indecision only' and needs a following directional candle.
DeleteTJ
ES 30-min, lower close after doji candle and back to R2 and the 18-day SMA.
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TJ
Cash (NDX) 15min -
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ES 30-min; price at 3,907. This is just beyond an 80% up wave on the last down wave. Further, objective measurement shows that a contracting diagonal could not be made if price gets above 3,915. This is what's known as a make-or-break for a wave count.
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It is one of the reasons that diagonals are patterns "that must prove their measurements". They are lower probability, and can fail to form properly.
DeleteDojis and sometimes even bearish engulfing candles these days often used for spoofing sport, Lol! I had a sneaking suspicion they would jack price to a higher high...and looks here! :D
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Possible we are in large flat for w4 down, otherwise we probably going to close gap. Then we might have a H&S setup.
DeleteES 30-min; there is now an up (green) fractal at the high, which is now the 'wave-counting-stop'. Above that level, there is exceedingly high risk a downward diagonal would break,
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There's lots of momentum from the automatic dumping of money into the market. The only question is whether a pattern will hold or not. Very short term, one might watch the 30-min slow stochastic to see if it loses its embedded status, and whether price travels below the intraday 18-period SMA.
TJ
Joe, are you using 8 SMA or is a typo error and you are talking about 18 SMA ?
ReplyDeleteThank you for all.
Lol, you just corrected it. ;)
ReplyDeleteThank you and GN.