The ES Hourly futures this morning made a lower low. They can legitimately be counted as 'five-down' with the extension in the first wave. BUT, they can also legitimately be counted as just 'three-down' with a triangle in the middle as in the second of the two ES hourly charts, below, with two roughly equal segments.
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| ES Futures - 1 Hr - Ambiguous |
As a result, the five-count could be an 'a' wave down, or the bullish falling wedge that ends a fourth wave of an impulse (in the ES nothing was overlapped).
Similarly, the three-count could end the (X) wave, just start a double-zigzag downward, or it can be part of a triangle (X) wave.
There are five possibilities here, one of which involves making a new high in some short order. So, the odds of getting this right (by random chance) are about 20%. These are not great odds. What will help is to see how long the up wave takes, and what pattern begins to form.
Looking at today's up wave is equally ambiguous. It can be interpreted as one wave up, and a flat correction in progress, or it can be interpreted as a potential diagonal in progress, although the retraces are shallow. More waves are needed.
One needs to be flexible, patient and calm and look for some clues. Wave counting does this from time to time. When it does, one just recognizes that battleships don't turn on a time. The jumbled count is likely due to the conflict created by the money being pumped into the system by Central Banks, versus the perceived value it is providing. It would have been more telling if the five-waves-down took out an important low. They did not.
Have a good start to the evening.
TraderJoe
Either 5 waves down or an abc
ReplyDeleteThis is why EW is worthless a lot of the time....
You sometimes have to wait a long time for a solid signal...
Lately I call it Elliott Guessing
I can tell by your level of posting 'EW' is not what you think it is.
DeleteTJ
Been doing it a long time.....
DeleteA necessary evil....but there are other methodologies that work better if you want to make money.
This is why I am of the opinion that other metrics that inform the most probable EW count are very important, no distespect to T.J.,"s work.
ReplyDeleteDo you know of any such metrics? that you can make public that could help us solve the wave conundrum in a juncture like this?
DeleteThanks Tachyon
We're still waiting...I asked for such months ago.
DeleteTJ
Sure fib. I will mention just one that I think is helpful, namely, trend-lines. We can clearly establish that the SPX trendline drawn off the March lows of last year has been decisively breached for the first time in fourteen months. As a trader, and I realize the site is not about trading but I think it is disingenuous to pretend that our interest in understanding EWT is purely academic, I would lean toward the current upward move being corrective and expect price behavior at the underside of the breached trend-line to tell me if I am right or wrong. That is the simplest of many I could reference and hope it helps to illustrate my point. Best regards, and thanks for asking. :)
DeleteThanks Tachyon- Appreciate your perspective.
DeleteConsidering big tech has broken below major support and probably wants to test it before further downside, I go with the impulse for now
ReplyDelete:)
DeleteAnother helpful metric is how the the charts of an index components appear, particularly the heavier weighted members. Key trend-line and support breaches there often fore-shadow impending developments in the index.
DeleteWhat does the eight fold path suggest? Seems it could shed some light.
ReplyDeleteAnother thought - if one thinks its 5 waves down, then drop to a low enough TF with A/O to analyze each of the impulse waves individually (1,3,5).
Delete.....OR do the wave at Higher degrees look complete? To me, the answer is yes.
DeleteMinute wave C in int wave W was a 5 wave before a sell off in Aug 2020.
Similarly now- the wave c of int wave Y seems complete 5 wave at May top 2021.
Need TJ's approval though...........
A third observation. Yesterday's 30min chart was already determined to be 3 waves down, (123 or abc). So, with the small rally wave and subsequent final move down, would seem you either had a 4th and 5th, or an a and b of expanded flat. To add those two waves to yesterday's chart and now say there are possibly 3 waves down calls into question yesterday's assertion that there was already 3 waves down. Cant have it both ways seems to me.
ReplyDeleteYes in futures; no in cash. Still a quandary.
DeleteI posted this chart this morning on SPY, with what might appear to be a gap in 3/3. The question posed was could this be 5 waves down? If time permits, see what you think.
DeleteThanks!
https://funkyimg.com/i/3c3iT.png
Agree. Gaps do occur in 3/3.
DeleteI think the market will answer the question with either 5 waves or 3 waves off the bottom and greater than .786 retrace would lead me to believe we are on our way to 4400.
DeleteES - the futures don’t look impulsive off the bottom? Any thoughts?
DeleteVIX - is retesting broken DT line and needs to close above 20
DeleteUpdate to ARKK (dly) [if interested] -
ReplyDeletehttps://funkyimg.com/i/3c3ry.png
Good morning all.. the counts are still somewhat ambiguous; here is the diagonal possibility I noted in the write-up. The timing is awkward, but the price structure is correct, and there is yet again downward overlap on ((1)).
ReplyDeletehttps://invst.ly/ut7t2
TJ
(fyi) Retail sales came out might lighter than expectations at 0.0% versus 1.8% consensus. Industrial Production, and Consumer Sentiment yet to go.
DeleteTJ
news is noise
Deleteits not going to help you
forget about it
Question:
ReplyDeleteCan W2 in the 5 down be a triangle under EW?
Comment:
Tachyon's TL from last March was touched @ 5:15AM EST and is now holding as resistance.
no; wave 2 can not entirely be a triangle. It can be w-x-triangle y.
DeleteTJ
Thank you..Much appreciated!!
DeleteLet me explain some more about the ambiguity. Look the the Fibonacci ratios in the first chart! The tend to give this count the edge (ES only).
ReplyDeleteAmbiguous count #1 -
https://invst.ly/ut8c0
Ambiguous count #2 -
https://www.tradingview.com/x/nDCrhBiD/
Yes, the EWO seems too low in the second chart, at -80% versus a guideline of +10% to -40%; so that gives the second chart one edge. But, it's wave ((iv)) misses the lower channel, and it has a very short wave ((v)).
TJ
For now , I would go with the second count. Triangle counts nicely(ewo reading and fib relation)- hence higher low 4th wave.
DeleteFirst target for SPY is 415+, 2nd (if plays out as suspected) 419+ (gap fill).
ReplyDeleteCorrection - 2nd is 417+ (not 419). Still filling gap.
Delete1st target reached.
Delete(fyi) Consumer Sentiment came out at 82.8, lower than prior 88.3, and lower than consensus of 90-91.
ReplyDeleteTJ
So, this is just food for thought. If the ES gets over 62% (not there yet, but close), many bulls will look at this inverse H&S.
ReplyDeletehttps://www.tradingview.com/x/1hg8vbqW/
I don't know if this will play out or not, but the measured move does make a new high. And, if over 78%, it is possible truncation territory, too.
TJ
There's one on SPY 15 Im watching. 2nd target is its MM (417+). Currently consolidating at OR upper boundary/200ma.
Delete..one other item to note, current up wave is 'shorter in time' than the down wave. Some times this happens if the down wave is forming a diagonal. But, as of now, 4.080 has to bust downward to even consider a lower wave.
DeleteTJ
SPY 15min -
Deletehttps://funkyimg.com/i/3c3E2.png
SPX - A = C up achieved and retesting broken TL from March lows
ReplyDeleteES 5-min: this can be five waves out of the diagonal, with (5) = (1).
ReplyDeletehttps://invst.ly/uta6-
TJ
ES daily - back to the 18-day SMA, "the line in the sand" @ 4,163.50.
ReplyDeleteI suspect the confluence of the underside of the broken up-trend line,the overhead gap,and the overhead RN around 4200-4208 will give clues regarding resumption of the bullish trend. In typical fashion, Mr. Market will keep everyone guessing and offer no resolution of that critical question today imho. Have a great week-end everyone!
ReplyDeleteTachy ..big technical question for you .. how do you 'know' it's not Mrs. Market?
DeleteTJ
Well T.J., My suspicion is that they are in cahoots...!
DeleteES 5-min .. also (5) = 0.618 x net [(1) through (3)].
ReplyDeleteResistance around daily 20 sma, and looks like is drawing an ed for that (5)th wave.
Delete..and another wedge ..
Deletehttps://invst.ly/utbvu
TJ
ES 1-hour: I urged caution in counting the down wave as a "5". It still 'could be', but remains very ambiguous. On the up side, price has passed the 62% retrace by a fair margin. Prices can still turn lower, but it is also possible we are in a whippy triangle for Intermediate (X).
ReplyDeletehttps://invst.ly/utczl
The ((c)) wave up, now, is more than 0.382 of the diagonal ((a)) wave which lends more credence to its being another leg of a zigzag. The up leg could still form as a double-zigzag, up, or even an impulse.
TJ
P.S. the best 'local' alternate I can find is that since this up wave is shorter in price and time than all of minute ((a)), up, then it could be a minuet (b) sub-wave of a larger flat for minute ((b)) as per the chart below. See the red labels. Although the minute ((b)) wave was short, which is fine, it was 'very, very' short.
Deletehttps://invst.ly/utd1u
TJ
Tj
Deleteminuet((b)) could be running flat variety?
where by circle a eneded at end of session yesterday and then a exp or running type flat that ended where your ((b)) is now. It took appropriate time imho if we count it like this.
have a great weekend TJ and everyone else.
No. The more I thought about this, the upward portion of the b wave would take up 'too much time' relative to the ((a)) wave and be a degree violation.
Deletehttps://www.tradingview.com/x/jGUspbkH/
DeletePlease excuse the labelling- it didnt come out right. Still learning tradingview text.
Delete..same issue; your claimed 'smaller degree b', up, is larger in time than all of your claimed larger degree 3, up, in the same direction. Time degree violation.
DeleteNow looks like the target is close the cash gap. Awesome how it looked like an ed wave and now it's extending into another.
ReplyDeletepossible a,b,c up of (b).
DeleteSo far, SPY 15min got within .33 of filling gap target from inverted H&S. Could be done, but looks like there's still a little gas in the tank. We'll see Monday. :o)
ReplyDeleteTJ
ReplyDeleteDid someone hack your blog or report it as a dangerous site? That's what Firefox is telling me.
Hi Andy, please see the Note: at the bottom of the next day's post. Sorry for any confusion. TJ
DeleteThis comment has been removed by the author.
ReplyDeletehttps://s3.tradingview.com/snapshots/u/U9L24n2E.png
ReplyDeleteHere's a view of TQQQ. Is it possible we were watching an extended fifth wave for this ticker?
This is from e siganl - Expect Wave 5 to end on one of the two upper channel lines. Usually, if Wave 3
was a normal wave, Wave 5 tends to end on the channel drawn from the Wave
3 top. If Wave 3 was extended and a runaway type of wave, Wave 5 tends to
end on the channel drawn from the top of Wave 1.
I'm getting the same warning (phishing) with google chrome. It looks like Big Tech doesn't want anyone to panic. Wave 3 of 3 of 1 down might be on deck Monday.
ReplyDeleteHi Superdave, please see the Note: at the bottom of the next day's post. Sorry for any confusion. TJ
DeleteARKK and TSLA - dly
ReplyDeletehttps://funkyimg.com/i/3c41R.png
Cathie gonna love that setup when arkk hits 70
Delete