As far back as January 19th, 2024, with a post entitled "Now You Know Why" at this LINK, I indicated that it was possible to count the up wave from October 2022 in two manners: either as W-X-Y or as A-B-C. The reason is that it was just possible to count the first A wave up as an expanding diagonal without breaking any 'rules'. So, because of the higher high that occurred in both cash and futures markets this week, I need to make a slight correction and revert to the A-B-C up count. The W-X-Y count was incorrect, but I had seen the possibility for either. Here is the revised chart for the ES Weekly.
As I said yesterday, it is necessary to understand that the current wave up since October 2023 is now a five-wave impulse wave. The Minor A wave is the expanded diagonal A wave, and the Minor B wave is the longest downward correction in the wave sequence in both price and time. The Minor C wave may not be over yet. But there is alternation in the corrective wave: Diagonal A, Impulse C.
This leaves the long-term count (the preferred count) unchanged in the following manner.
The current divergences are clear, as is the point where the RSI peaked - which clearly should be a third wave. Note that wave Intermediate (3) will not invalidate until it is longer than Intermediate (1). Price is not there yet. And, if that level is exceeded, it will clearly still be a wave (3) - just not one in a contracting diagonal.
Is there an alternate? There is. But it sees wave Cycle V as over already. Here is the alternate.
This is possible, but the first long term chart is slightly preferred precisely because we have not seen a longer-term diagonal to end the wave set, yet.
Have an excellent start to the evening,
TraderJoe
Thanks for your excellent analysis & charts, TJ! 😊
ReplyDeleteOne cannot even buy anything better.
Welcome HG & thanks for saying! TJ.
DeleteTJ, I like your alternate. I think that is correct. Thanks
ReplyDeleteWelcome. TJ.
DeleteWas also contemplating possibility of the expanded flat. The whole world is bullish!! 😊
DeleteES 4-Hr: the task now is to resolve the current up wave, specifically to determine whether this 4-hr wave fills out a channel or not.
ReplyDeletehttps://www.tradingview.com/x/Jg7Quf7F/
For those really, really interested in learning Elliott Wave, I add this link. It shows the only 'legal' way, following the rules, I can count the bottom formation. I did this to find out 'where specifically' wave (i) is. The only formation that works is an expanded diagonal with a slightly truncated zigzag for wave ii.
https://www.tradingview.com/x/S4hI2QFf/
One would have 'liked' to see a lower Ⓒ wave in wave ii, but it is absolutely 'not' required. Zigzags truncate frequently enough that they have been well-identified. Then, all the three-wave sequences up, work out, and the lengths work out too.
TJ
why not a possibility of expanded triangle with recent high being B (abc formation)
ReplyDeletetypo running triangle
DeleteBy analogy to the 2000 top - degree symbols are just relative for the example.
DeleteLink to 2000 Top Chart
TJ
..also, 'typically' triangles have 62 - 78% retrace legs. This one only had a 50% retrace. So, that still seems to favor 'too far, too fast' - the diagonal. Note the retrace for wave ② in 2000 was only about 38%, which is atypical for a triangle OR a diagonal and really points to 'too far, too fast' IMHO. It is then followed by an overlapping wave ④, and regardless of the measurements that kind of 'seals the deal'. Am I saying a triangle is 'impossible' here? No. But it would be second alternate at this point. TJ.
DeleteRegarding the alt count, how can an ((A)) wave be an expanded flat?
ReplyDeleteIn a series of flats called either 'double-three' or 'triple-three'. Read your Elliott Wave Principle by Frost and Preacher, or Mastering Elliott Wave by Neely. TJ.
DeleteThat potential ED answers an awful lot of questions for me about market price and fundamental analysis. An ominous pattern and exactly what one would expect at the end of a rate hiking cycle.@David it simply means the higher degree correction is also a flat.
DeleteYes, and if Ⓐ is in the three-waves shown, then Ⓑ would likely be a >90% wave too, in this example (none of which has come to pass, yet). TJ.
DeleteStimulus News - It keeps on comin'
ReplyDeletehttps://www.zerohedge.com/markets/pboc-unveils-42-billion-monetary-cannon-boost-debt-stricken-housing-market
TJ
Tilting at windmills. The implosion of Evergrande and Country Garden was inevitable considering the way they ran those businesses. Despite the desperate fight to avoid liquidation, recovery for either seems unlikely. Huge blow to China's economy.
DeleteSPY 5-min - from the high. Five-down can be counted, but doesn't look like a good three of an 'a' wave, yet. Very, very compressed still. So likely a first wave, down.
ReplyDeletehttps://www.tradingview.com/x/sZf5bTLH/
Ignore the degree labels, they are relative only for illustration.
TJ
Choppy corrective action, a little higher and then I think this drops into the close. Gap down Monday if 1 is finished
ReplyDeleteEven before the dramatic rate hikes, price to sales, price to earnings, debt to GDP, and money velocity all suggested some froth in equities. I thought about 30% worth. If that ED is indeed the correct count, the froth is more like 50%> Let's see if the money printers can negate the power of the pattern. Have a great weekend all and thanks TJ for the big picture!
ReplyDeleteWe have a possible false break in the UST30yr. Below 107 is possible. Also looks like silver is in a 3rd wave up. These idiots at the Fed and Congress have set the stage for a significant top here. NVDA is Tuesday. It is always possible for a 5th wave truncation. We shall see. Btw you never know what could happen in the Geo political realm either.
ReplyDeleteTJ, I did change the scale and you were exactly right about inflation distorting the chart. But now a channel exists and there are several overlaps present. Go a head and delete if you want. I just don't understand how the price action while still in the channel goes from a impulsive structure to a 3 wave. We do have overlap in the beginning wave one.
ReplyDeletehttps://i.postimg.cc/Bb1MCr5m/Screenshot-173.jpg
READ, The Elliott Wave Principle, Section on Incorrect Counting
Delete"The overall appearance of a wave must conform to the appropriate illustration. Although any five-wave sequence can be forced into a three-wave count by labeling the first three subdivisions as a single wave A, as shown in Figure 2-13, it is incorrect to do so. Elliott analysis would lose its anchor if such contortions were allowed. If wave four terminates well above the top of wave one, a five-wave sequence must be classified as an impulse. Since wave A in this hypothetical case is composed of three waves, wave B would be expected to drop to about the start of wave A, as in a flat correction, which it clearly does not. While the internal count of a wave is a guide to its classification, the right overall shape is, in turn, often a guide to its correct internal count."
The book has the illustrations. It is not my job to give you private individual tutorials on wave counting.
TJ
Ok,so all of your counts are a viable option. Under your count if we top here given we do in the next 100 ES points that cannot be the end of the Supercycle wave III, But could be an irregular B. The other count would expect a larger wave 4 and another leg up towards the election.
DeleteJust one thing,from the 2009 low Elliott would only allow a nested 1,2,1,2 to explain the overlap? Anyway I don't mean to be a pest...thanks for all your help.
No, the wave off the bottom (on a weekly chart) counts like a simple non-overlapping impulse in a wedge shape in the following manner.
Deletehttps://www.tradingview.com/x/RpUbsHWi/
There are no conflicts, there are no overlaps; the 4's are well above the 1's and must be counted impulsively - regardless of what it looks like to your eyes. It's the measurements that count.
TJ
Ok good enough. I'll get my eyes checked..
DeleteLol
end the day with the 2 complete, nasty if true.
ReplyDeleteTj,
ReplyDeleteusually 5th wave in precious metals extend higher. If this is the 5th wave up in gold and silver what could be the targets ?
@Anan.. don't put the blinders on. Projections and alternates look like this.
Deletehttps://www.tradingview.com/x/4OxFXuxr/
Beyond 2,530 are 1.272, 1.382 and 1.618 x ③ for a true ⑤. I am providing cash GOLD's local targets only. If you want to do the extended ones it is a good exercise for you & a Fibonacci ruler. Because 1.618 is nearby, don't forget about a running triangle possibility, or a Flat, as well.
TJ
Thx so much TJ, I was gonna ask your thoughts.
Delete@BBR .. welcome. TJ.
DeleteThanks alot Tj
DeleteAll markets seem to be influenced by interest rates. Here is American Express on a 4 hr chart. Is it ending? Could be and as a disclaimer my EWT counts are suspect.
ReplyDeletehttps://i.postimg.cc/BbVkSGJG/Screenshot-174.jpg
nice chart! That's the way to do it (just putting the degrees aside for the moment). TJ.
DeleteThanks TJ, I like the advice!
DeleteSpeaking of gold, remember when Fed Chair Greenspan said he use to target interest rates using the USD price of gold? Or when Volcker raised 5 points when silver and gold started accelerating higher? Well here is a 4hr chart of the ZB_F UST bond. Lot's of people expect the bond to head higher here in a C wave up. But the rejection at the upper trend line gives me pause. I would think the price action in silver and gold foretells problems a head and rising interest rates. Next week should bring a clue.
ReplyDeletehttps://i.postimg.cc/brSrNp1x/Screenshot-175.jpg
P.S. notice in this chart how 'x' OVERLAPS Ⓐ; 'that' is what prevents the impulse count down. NOT like your GS chart. TJ.
DeleteOk TJ then expect a C up to complete wave B
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ReplyDeleteJust one more financial which is Goldman Sachs GS. Looks to be all 3's and the interesting part is the current move up each leg as I count it including next week will be 10 weeks. Hmmmm
Deletehttps://i.postimg.cc/W4KCMvQY/Screenshot-176.jpg
why are you assuming it will end as 3 waves it could go for 5th wave also
DeleteWhen are readers here going to start doing any interesting work? GS is shown below from its IPO in 1999 and showing that the current move up is in five waves (albiet of larger three-wave moves on record).
Deletehttps://www.tradingview.com/x/SSXFkdVZ/
When you're dealing with an IPO, one just doesn't know prices, but one can assume there was 'economic activity' before the IPO as a private firm.
TJ
TJ, just taking a interesting transfer of your GS count into the LT ES. Might not work at all,but I'm sure there is a explanation for the count in GS. Interest rates?
DeleteFed QE? Machine trades? Anyway nothing says that (C) won't have 9 waves up.
Btw Robert Prechter yesterday concluded that the Dow is no longer in a B wave up. But expects a top in about 3 weeks. That would be inline with the Fed June meeting.
https://i.postimg.cc/4xzNcyKy/Screenshot-177.jpg
Then again https://i.postimg.cc/sg6y7WjV/Screenshot-178.jpg
DeleteHere is another count from Henrik Zeberg. https://i.postimg.cc/zvBFL40D/Screenshot-179.jpg
DeleteOn my GS transfer...Where does (A) equal (C)??
Delete@458 .. I'm ignoring all of your last stuff for the following reasons: 1) there is no comparison between GS and the whole market (ES) .. that is ludicrous. I won't spend time looking for reasons, 2) your counting of 7 or 9 is spurious and not based on measurement - just what you think you see, 3) you refuse to use semi-log scale, 3) in the HZ count, within larger Ⓥ you can't have a claimed smaller degree ② which is larger than the entire larger degree circle-IV or circle-II.
DeleteIn short, you appear to be not following a particular method, and certainly not The Eight Fold Path Method as I've outlined as the Featured Post in the upper right-hand corner of the main blog page.
See my Sunday post - when it is up.
TJ
I'm sorry. I just got curious when you posted your chart of GS. I will no longer pursue this foolery.
DeleteA new post is started for the next day.
ReplyDeleteTJ