At this writing there is still no deal on whether the government will be open over the weekend or not. This is an important issue and may have an influence on whether prices go over the high again or not. Still, from a chart perspective our task is relatively simplified. We were able to count five-wave-up today with an extended first wave. So, the task now is to use The Principle of Equivalence to simply determine if we get three-waves up or five-waves up.
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| SPY Cash - 15 Minute - The Principle of Equivalence |
I recommend using the SPY cash 15-min chart for this purpose, as above. The first item up for grabs is to see where the b/ii wave winds up on Monday morning. If price gets above and stays above the EMA-34, then it likely has more of a positive bias, temporarily.
The concern for a simple a,b,c wave, up, is that it would likely be shorter in time than the down wave. Not impossible, but then not the best corrective wave. One way to extend the time of the correction is to see if the c wave would become a diagonal, alternating with an a wave impulse. Another way to extend the time & frustration of a correction would be to make a double-zigzag. None of that is in evidence, yet.
If, on the other hand, this up wave in a channel becomes a five-wave sequence instead of remaining as a three then we need to question whether price will go over the high again as part of a larger diagonal that we showed at this LINK, before (see alternate red line). The down wave is just over 62%, and there is one way to count it as a-b-c down, but it is very non-proportional and is quite quick to be a larger diagonal second wave. Still, it might fit in a larger diagonal as a second wave.
So, just take it step-by-by step and see if we get a clear five-waves-up, Or, if this up wave remains a three or even a double zigzag. That's enough work to do over the holidays!
Have a good start to the evening and the weekend,
TraderJoe
Thank you, qqq tested but didn't close over is daily 18ma and the Vix stopped at major support. Should be interesting into Christmas.
ReplyDeleteFlagging price action on all three indices' hourly chart. Looks like higher in the near term.
ReplyDeleteA couple of notes on some broader measures. First is the NY Composite Index (of all the stocks on the NYSE). It has now invalidated a further contracting ending diagonal by trading below its 04 Nov low.
ReplyDeletehttps://www.tradingview.com/x/RlYDck3v/
Second is the equal-weight SPX (symbol RSP). We note that this index, too, has invalidated a further contracting ending diagonal by trading below its 04 Nov low.
https://www.tradingview.com/x/uaHwi5d1/
This does not mean that indexes or futures more levered to the Magnificent 7 can not make new highs, it only provides information that lowers the 'probability' of that happening some. Not impossible - just lowers the odds.
TJ
alternativ here is an expanced flat began in october
DeleteWhile I won't say "no" definitely, I will say very, very, very low odds. Why? Because, as you have stated it, then blue 'b' is longer in time than the longest 3 I can give and would be a violation of time degree definitions because blue 'b' is supposed to be a smaller degree than 3, the last higher degree wave in the same direction.
Deletehttps://www.tradingview.com/x/hxA3hTsu/
Also, 'b' is greater than 1.618 x a, which tends to 'rule out' an expanded flat. Also, isn't the point of an expanded flat a lower low than 'a'? That would mean more downside to come, anyway. All of these things are checked before I post.
As far as I can tell, there is something else going on.
TJ
i appreciate the effort and committment
DeleteThe c being lower than a. Is that a guideline or a rule like 3 can't be smallest. Thanks
DeleteWhat abt running flat
DeleteSee the next day's post which is now up. TJ.
DeleteCurious about new IYT hight but not DJT. Is it still a DOW theory non-confirmation?
ReplyDeleteAll I can say is IYT is 'loaded up' with consumer airlines and rental car companies. It includes stocks like (Allegiant Airlines, SunCountry Airlines, JetBlue Airlines, Alaska Airlines, SkyWest Airlines, Hertz Car Rentals). These companies are more involved in 'people moving' and service/entertainment, and not the 'movement of goods' like the DJT. The DJT has 'some of this' but the IYT seems over-loaded with it if one was thinking of comparing "goods production - to goods movement". Yes, they are 'transport' companies but not 'goods' transport companies. TJ.
DeleteP.S. It is possible to look at shipments directly. The Baltic Dry Index is one measure. The link below is for shipments in North America, specifically. See first chart.
DeleteCass Freight Index
While not in 'dire straits', product movements have not surpassed either of the prior two highs. And I think the data are based on dollar-volume from invoices. So, inflation may be skewing the results higher. Just worth noting. TJ.
Thx TJ. Great insight!
DeleteA new post is started for the next day.
ReplyDeleteTJ