It has been vexing over the last few hours to determine what the wave count is primarily because the ES futures gives a longer wave up from the 2022 high, while the cash provides still a shorter wave up. Clearly, this could be rectified if cash turned up and made a higher high. This is still possible by-the-way with an extended form of the contracting ending diagonal that I posted at this LINK as an alternate. See the red count.
But what if the situation does not rectify itself? Is there a count that could explain both of these phenomena at this time? I submit there is. That count is below as the Extended Fifth Count (x5). Right now, this count is an alternate, but a viable one.
The reason this count is an alternate is that there is no conclusive evidence - such as an unquestioned overlap - that requires this count.
Still, the Fibonacci ratios are intriguing: wave (3) is 1.272 x wave (1). Wave (4) is a very deep retrace on wave (3), and it does overlap wave (2) in this configuration, but not wave (1). And then the magic happens in this last wave up from Sep/Oct 2022. The wave x5 is 1.618 x wave (3), a very common relationship when the fifth wave is the extended wave. Note, too, there is good alternation between the second and the fourth waves, both in shape and in time.
If this is an extended fifth wave, as the top of a major sentiment peak, it could well represent the end of the Cycle, and the end of the SuperCycle. And such a wave can be retraced 62%, or fully, or more! However, the way wave patterns are best developed is by using the hard evidence that compels the pattern. There are still ways the downward waves could fail to form overlaps with consequence. And if they do not, we will use that evidence.
Note one other item, the above count preserves the move from March 2020 to Jan 2022 as a three-wave sequence, as we have in either the contracting or expanding diagonal count. All it does is raise the degree one level of the first wave sequence (1), up. I have not seen this count anywhere else. As far as I can tell, it is original with the author.
Have an excellent rest of the day,
TraderJoe
While I was not sure how to count it, the recent price action did seem terminal for so many reasons. I like this count. Thx!
ReplyDeleteBtw, this same count was published by Lara Iriarte who two years ago predicted a SC top in 2025. At the time I thought she was mistaken. 😊
ReplyDeleteWell, that is interesting to know because it adds some validity. Thx. TJ.
DeleteThanks again TJ!
ReplyDeleteWelcome BBR! TJ
DeleteSPY Cash 1-D: poor cash close for two reasons: a) close at the low, b) close under previous ii - iv trend line. But the close did - at least - hold the prior support.
ReplyDeletehttps://www.tradingview.com/x/bsaTs2SB/
TJ
Yep. Perfect back-test!
DeleteSeems like 5 wave down in qqq and spy almost there from the top
ReplyDeleteJust a consolation today, more push to the downside is probable. Significant was Qqq closing solidly under the daily 18ma.
ReplyDeletehis count actually addresses my initial reactin to wave 1 (now its red 3), being too big.
ReplyDeleteLooks like a Merry Christmas for the bears! I suspect a Happy New Year as well.... 😊
ReplyDeleteidk
DeleteES 30 min.
ReplyDeletehttps://imgur.com/tmJ4tKQ
.618 retrace is at prior support.
DeleteBullish count would be a completed flat this morning that corrects move since August.
ReplyDelete