The daily Dow futures timeframe just happens to correspond to 111 candles on the chart - in the range for using The Eight-Fold-Method for Counting an Expanding Diagonal. The chart is below please look it over closely. This pattern is for a 3-3-3-3-3 Expanding Diagonal so it 'must be' terminal - according to the published 'rules'.
Note how the Elliott Wave Oscillator clearly shows the expanding pattern. The EWO for wave (iv) is deeper than that for wave (ii), and the EWO for wave (iii) is higher than for wave (i). Further, every numbered wave is on an opposite side of the EMA-34 showing good form and balance.
Since the pattern must be composed of zigzags, we know that wave (ii) is a slightly truncated zigzag which augurs for the large upward wave sequences that follows. But - in any event - wave (iv) does not exceed the low of even the truncated zigzag.
Whenever we count, we try to count by 'fives' first. And what is the overall pattern shown above? It is a 'five'. This is likely minute ⓒ of Minor Y of Intermediate (3), upward. Why? Because we are 'also' attempting to count five waves up to Intermediate (5) of a Primary ⑤ wave of a Cycle V wave. And, if we can't count by 'fives' usually because of overlaps that would break the rules, then we count by 'threes'. But this pattern overall results from the fact that we are trying to count by fives in the first place!
The Eight-Fold-Path-Method is an aid to doing this because the possible patterns begin to emerge as the number of candles approach 120 - 160, and as price begins to wind back & forth around the EMA-34.
Do we know that the count above is over? We do not. 'Often' Expanding Diagonals end slightly before their upper rising trend line. Sometimes they cross it a bit. There is an inverted hammer candle at the high, but that's all it is. It is not even a red candle. Confirming lower close candles would have to occur. They are not in evidence yet, but we'll be looking for any such signs.
Have an excellent rest of the weekend,
TraderJoe
Re-reading EW rules for Expanding Diagonal. The classical TA depiction of the pattern is "Broadening Rising Wedge" and this one is absolutely text-book. I think it 's going to pierce the upper boundary. Why? Cuz of that long wick on the shooting star candle! If y'all get my drift.... 😊
ReplyDeleteHow rare are expanding diagonals in the Dow 30? How rare is a 3 peaks and a domed house in the NYA average? Pretty darn rare when you have 5,000 stocks all making the same pattern in lock step with each other. The 3 peaks signify "distribution", also known as the "bump" section of the formation. The "run" is a 3 step rally into the final top. How rare is this pattern for this index? I doubt it has ever been seen before. If it is what I say it is, Prechter might be live to see his Supercycle top.
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The NYA also made a infant fractal of the larger parent. If this indeed is a top of note I find it amazing.
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How about the 4 day chart of the German DAX? I must be imagining things. I'm done.
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The size of some recent down candles does indeed argue for distribution, and on a massive scale! I am wondering, to WHOM...??!!
ReplyDeleteFor the last 6 months it has been a traders market. So it looks like the musical chairs game could played here. Nobody seems to be bearish here except Prechter and that is effected by the calendar lately. But who knows really,it's all about getting a edge. This advance since 2020 and really since 2009 would swing in favor of distribution.This week and October should answer the question.
DeleteThe Bogleheads and other passive investors.
DeleteBaby boomers are retiring at the rate of 10K daily. This argues for increasing net outflows from equities. Credit card debt at historic highs and most consumers living paycheck to paycheck. Retail investors are strapped. Two official Hindenburg Omens on the clock and new lows and highs daily within a whisker of generating a third. And all this at a time with equities at all time highs. Are you bullish? 😊
DeleteMany thanks for sharing your wonderful work with us
ReplyDeleteVery welcome. Thanks for saying! TJ.
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ReplyDeleteTJ