First item: The Black Count it Is! Not reflected too well in cash, but fits like a glove in futures. Next wave down may be a correction (as in a Flat) or may impulse down. Too early too tell.
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| ES Futures - 4 Hr - Diagonal |
Second item: some people have chosen to criticize the diagonal counts. Just for them, here is the Russell Futures four hour (4 Hr) count.
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| Russell (RTY) Futures - 4 Hr - Diagonal |
Besides the fact that all the measurements are correct, and there is a numbered wave on every other side of the EMA-34, along with an expanding pattern on the Elliott Wave Oscillator, I really have only one other thing to say about this chart: there is literally no other way to count this mess (except as its triple zigzag expanding counterpart) because of the highly overlapping wave structure, and the constant push & pull throughout the trading day. In short, by itself, "It is not impulsive!
Finally, I have only one other thing of note to say today:
STOP counting cash! It is simply not reflective of the market prices made outside of the small window from 09:30 ET to 16:00 ET. Period.
Have a good start to the evening.
TraderJoe
Thank you ET, this whole period since the last top has been very interesting and your analysis very helpful.
ReplyDeleteRussel's diagobal is a textbook sample, awesome.
yw..
DeleteNQ has a clean count so far. Thks
ReplyDeleteThks!
ReplyDeleteFor those interested, stocks above their 50ma (update) -
https://funkyimg.com/i/3biw4.png
yw..
DeleteWe need lower levels for a bottom
DeleteStockcharts shows 17%
DeleteAmazing work, ET. Thank you
ReplyDeleteyw .. Walter!
DeleteAll.. it is worth noting that the 'strict wedge' has broken. This might eventually allow the larger red (X) wave, as below.
ReplyDeletehttps://www.tradingview.com/x/nBw3N227/
TJ
Awesome work TJ. Thanks for your analysis.
DeleteET, Nice work! Per that chart, I notice we closed near or at the 34 ema (didn't dig in to look closer) Anyway if the 50 day ma starts taking a dip downward than I'd put more weight on the X wave. I posted a chart of SPX where I was thinking this is wave c down. Bear with me I'll add 2 charts of adx, 1 NDX and other SPX.
Deletehttps://www.tradingview.com/x/iYtvmrWy/
https://www.tradingview.com/x/3szcU9PU/
I'd kinda think any bounce on SPX may over lap until this correction clears up. Maybe "Buy in May and Walk Away"
We have counted contracting diagonals in here that we determined the lost of divergence in the EWO on the fifth wave was a deal breaker.
ReplyDeleteWhen I see diagonals or triangles that do not follow the signature EWO look, I really start to lower the probability and make me think of what I am missing.
So while I see the diagonal in the ES and even nicer in the RTY, I can also see both of them running in corrective channels.
Unclear? RTY in a channel?
DeleteSorry, /RTY is my Russell 2000 futures symbol. Both ES and Russell 2000 futures trying to hold their channels this evening.
DeleteBelow are a couple of interesting fibs that may argue the whole correction is done.
ReplyDeleteFirstly if we swap (i) for an (w), (ii) for a (x) and (v) for a (y) we find that (y) = (w) x 1.385.
Secondly if we swap (i) for an (a), (iv) for a (b) [making (b) a failed expanded flat] and (v) for a (c) we find that (c) = (a) x 1.239.
Last time I asked why count cash you hedged and said it had purpose. Have to thrown in towel? Keep up the great work
ReplyDeleteRe: Stop counting cash. Could use some clarification here. I know the futures are a traded item and the index is not. However I wanted gain a little perspective so I did a volume analysis on the futures. As the old saying goes, volume leads price. My results are as follows, using Wednesday as a sample.
ReplyDeleteContracts traded during cash market hours 1,793,200 =79%
Contracts traded during off hours 481,600 =21%
To take it a step further I am dividing by the number of session hours.
During market hours there were 275,900 contracts per hour traded
During off hours there were 27,250 contracts per hour traded.
That's a 10 to 1 ratio.
How does one assign an equal weight to there relative action?
Never said anything about applying equal weight. The issue is maximum price excursion. Futures simply 'travel farther' than cash does.
DeleteHere's one view via a question and answer -
ReplyDeletehttps://funkyimg.com/i/3biNy.png
Except Neely said it was due to 'time decay' in futures. One needs to remember that a stock 'average' is merely a derived quantity from the individual stocks that trade. And even they trade overnight, now, which they did not when Neely wrote the book.
DeleteTJ- is it true that Neely had more losing trades than winners? I heard that from Avi Gilbert. He said if you follow Neely you will lose money in the long run.
DeleteSomething I've always wondered about EW. Was the theory itself not developed based upon cash charts?
DeleteSecondly, perhaps from a reverse perspective, could the overnight moves in futures not seen in cash actually be distorting the cash markets, in a sense "phantom" highs and lows?
How can it objectively be determined which is "right"?
Thanks
As Joe says, wave theory books are written many years ago. In days or weeks with strong volatility, looking to the future is very important and less so when the market slows down.
DeleteObviously, when a gap is present in cash, you have to see the future to know what has happened in that gap, to see the hidden waves.
Cash provides the figures more like the theory books; instead, the futures distort some waves, mainly the correctives that usually are very long in time.
Some guidelines such as line 0-2-4 are more debatable in futures, precisely because there are sometimes very long-night corrective lateral waves that distort the channel, this does not happen in cash.
DeleteI wonder whether it would be acceptable for a corrective wave during the night of a lower degree to last longer than a higher degree correction formed during the cash session.
In other words, do we need to be more strict in wave degrees of price than in time in futures?
NQ/NDX H&S ? -
ReplyDeletehttps://funkyimg.com/i/3biUu.png
It's so clear that it wouldn't surprise me to see it foiled
Delete👍
DeleteQqq- H&S target 297
DeleteSorry- 284, bad memory, lol
DeleteWill we retest 311 neckline or go higher in possible B wave?
DeleteMany of the weekly charts (example - https://schrts.co/NHfTWvnF) are losing or have already lost their embedded SStoch., have broken their prior swingline lows, and are below their 18ma.
ReplyDeleteMorning...good stuff Joe, thanks
ReplyDeleteIMo the 10yr is the key..yesterday it held firm..up up and away..where it stops the 64k ? Good luck all
Good morning all. After The Eight Fold Path Method called the bottom in the US Dollar (at red *), the Dollar is now well up and away out of channel.
ReplyDeletehttps://www.tradingview.com/x/brSUuJxq/
TJ
👍 nice call
DeleteES 1-min; they're doing it again, and I'm telling you, it's hard to make this stuff up. The new lower low has already been made.
ReplyDeletehttps://invst.ly/u1swt
TJ
ES 1-min: such a diagonal is only good down to 3,728.25 or 3,730 as a practical matter. Beyond that - must assume something else. On the up side, look for a break of the down trend line, and a back test that holds.
Deletehttps://invst.ly/u1t1c
TJ
..held by one tick, and trading back into diagonal! Diagonal itself 'may' have ended where shown above, and everything after 'might be' a subsequent wave - like a flat. Still, it has held where it is.
Deletehttps://invst.ly/u1tcp
TJ
Question: Does one look for the same Fib retracement targets when correcting a leading diagonal as one does for an impulse?
ReplyDeletePT - without quoting the whole book, here, leading diagonals can be of two types, 'a' waves and '1' waves. 'Supposedly' if a leading diagonal is a '1' wave, the retraces are deeper than if they are an 'a' wave. That's what Prechter says. But, some 'b' waves are 78.6% waves anyway. And the problem is a diagonal simply does not have to be leading.
DeleteTJ
ES 1-min; now up and over upper declining diagonal trend line. Diagonal is confirmed as over. Watch potential up channels closely.
ReplyDeletehttps://invst.ly/u1ti3
TJ
..any new lower low is likely the next wave lower. The diagonal does not have to be leading. Note that the 3,720 low has 'not' been broken yet. So, one needs to be flexible and patient.
DeleteTJ
..this chart just shows the successful back-test of the upper diagonal trend line.
Deletehttps://invst.ly/u1to1
TJ
..and now a 62% retrace wave.
DeleteLooks like a clean impulse up off of the bottom on a 5 min chart.
ReplyDeleteES 5-min, switching to the slightly longer time frame, there is now a clear "deep retrace" beyond 78.6%, and the only question is whether the high is respected or not. IF it is not, then the diagonal may have ended a Flat wave, since the prior low was not exceeded, yet.
ReplyDeleteOn the other shoe, some real acceleration is needed for a 'true' third wave down.
https://invst.ly/u1umq
TJ
ES has gone over the top. Let's call the down wave 'X'.
DeleteTJ
We now have 120 bars on a 1 min chart and the EWO appears to have the correct signature and the correct alternation above and below the 34EMA.
ReplyDeleteLooks like a C wave, ala bull trap
ReplyDeleteDiagonals infamous for deep re-traces. Nothing unusual here methinks...
Deletecould be true, but I'm still very wary of the NQ head and shoulders. Noone is expecting a meltdown next week.
DeleteHere's a 30-min chart; let's call the down wave ((X)); it can always be the ending diagonal of a Flat, or it's triple zigzag contracting counterpart.
ReplyDeletehttps://invst.ly/u1v2i
TJ
All signs point to the impulse having ended. The post pattern action does not look impulsive so far but there could have been a small leading diagonal formed on the 1 min chart or there could be a wxy forming.
ReplyDeleteVIX would likely have confirmed the end of any corrective move up with a gap higher...not yet so far...
DeleteES 30-min .. 'minimal' flat objective reached.
ReplyDeletehttps://invst.ly/u1w36
TJ
..because the down wave, or ((X)) wave, 'did' reach the 90% level. The entire correction may be seen as a flat micro-A-3,B-3,C-5. And C-5 may not be done yet.
DeleteTJ
..either way is acceptable. The upward ((C)) wave does 'look' more like a typical C wave than it does a zigzag.
Deletehttps://invst.ly/u1wd-
TJ