For the first time for this alternate, we can count a legitimate triangle in the ES daily futures that goes back to October 2024 high. We have been very, very patient waiting for the three-wave sequences and overlap that make this alternate even possible. Further the ⓔ wave dipped further below the 62% level today and broke the prior daily fractal lower.
As with the remainder of The Fourth Wave Conundrum counts, we have some probability associated with it, but it is a low number (in the 20 - 35% range) because of the number of possible patterns.
The benefit of this pattern is that it cuts off the 0 - 2 trend line in the right location, making everything to the right of Minor 3 part of the potential fourth wave.
Can the pattern devolve lower into a Flat? It can. It just hasn't yet. Still there is absolutely nothing to the downside that will surprise us. Can the minute ⓔ wave develop further sideways into a triangle, itself? It can. That is because so far it only looks like simple zigzags make up the legs of the potential triangle.
Maybe the pattern is waiting for some significant economic news. We shall see.
One word of caution regarding a Flat wave, is, as we showed, the New York Composite Index already has overlap on its first wave up. The triangle might help to rectify that if it comes to pass.
We're following it closely. We can't rush it. We think this is a really excellent lesson in fourth waves and why I coined the term The Fourth Wave Conundrum. It is interesting. It is trying. It is fatiguing, and it is instructive.
Have an excellent start to the evening,
TraderJoe
Appears to be very "boxy". My preference remains the "flat" count. That's just my opinion of course.
ReplyDeleteI certainly agree with the 'boxy' look. TJ.
DeleteIf I remember correctly, these barrier triangles use up a lot of energy so the exist is often weak, although this would be a running variety.
ReplyDeleteIf it's a true barrier triangle, then yes, s weak exit is a good likelihood. No proof yet, though. TJ.
DeleteIf it's triangle E, shouldn't we have a rally first to create the B of the final ABC of said E? This has been choppy like an A Wave.
ReplyDeleteAlso Vix daily looks like a large triangle as well and we are at the top of the range.
DeleteYes. A rally is not out of the question if the 'e' wave triangles. Didn't get much of a start today, tho. TJ.
DeleteThe only thing that is in cash the down move seems like straight 5
ReplyDeleteHere is ES with a little sneak.
ReplyDeletehttps://imgur.com/8ZopuMK
Is that an alligator?
DeleteIts my Ira Epstein study.
DeleteI am also starting to wonder since this triangle is so large, if its not b of a diagonal 1 wave.
ReplyDeletehttps://imgur.com/6F2DdbE
That first wave could either be a diagonal or and X1 impulse depending on if one adjust for contract changes or not.
My...that would be quite a bullish scenario. I happen to think we are in extreme bubble territory! 😊
DeleteWould only need minor new high for 3 and 5 could fail at this level.
DeleteThe c of 1 only needs a high over b wave of the current triangle.
Dying to the right would be the look.
Good luck to all Today.
ReplyDeleteIf nvda news bad then ndx will form a HS
ReplyDeleteES 30-min: three closes below the lower band drops the odds to ~3-5% that that the next close will be below the band. Not impossible, just lower odds.
ReplyDeletehttps://www.tradingview.com/x/T2E1bkKk/
Yes, this wave 'could' go down to bottom if it wants, tho a retrace of some kind is getting more likely.
TJ
ES 30-min: first close back inside the band. Resets the number of consecutive closes.
Deletehttps://www.tradingview.com/x/VWV2I3NH/
Notes: cross of 18-ma under 100-ma; slow stochastic in over-sold territory. Nothing particularly bullish on the intraday chart until price gets back over the 18-ma.
TJ
no. the next close has much higher probability than 3 to 5%. seeing a pettern with 4 consecutive closes in this time frame may have that probability:, seeing a 4th close after seeing 3 consectuive closes the probabilibiliyt for next bar is much higher.
Deletethis is from chatgpt building on prior discussions for background usng real data on daily sp500 closes to illustrate..
"You're making a fundamental probability mistake. You keep saying 'the next close under the band has a 2% chance' based on unconditional stats. But that’s the probability of seeing a random four-close streak in history, NOT the probability of the next close being below the band given we already have 3."
"To prove this, let’s use actual S&P 500 data from the last 9000 days:
1 close under the band = 5.22% probability.
2 consecutive closes = 2.19% probability.
3 consecutive closes = 0.76% probability.
4 consecutive closes = 0.24% probability.
5 consecutive closes = 0.07% probability.
6 consecutive closes = 0.02% probability.
7 consecutive closes = 0.02% probability.
Now, let’s calculate the REAL probability of the next close staying under the band:
Given we have 1 close already, the probability of a 2nd = 2.19% / 5.22% = 42.06%
Given we have 2 closes already, the probability of a 3rd = 0.76% / 2.19% = 34.69%
Given we have 3 closes already, the probability of a 4th = 0.24% / 0.76% = 30.88%
Given we have 4 closes already, the probability of a 5th = 0.07% / 0.24% = 28.57%
So when you say ‘the next close has a 2% chance of staying under,’ that’s just wrong. The actual data shows that if we already have 3 closes, the probability of a 4th is 30.88%, NOT 2%."
"Your mistake: You’re treating historical streak frequency as if it predicts the next bar. But the real probability is conditional—once we have 3 closes, the next one is still about 1 in 3 to stay under, NOT 1 in 50."
I respectfully disagree. The 'Rule of Thumb", and that's all it is, I'm using works on the daily, and currently works on the ES 30-min: I have not seen one exception yet. I think your stats might better apply to a situation where the "zero line" is static and not moving, and where the band width is not already being adjusted for volatility. In other words, "your mistake" is applying static probability to an already dynamic chart which is already being corrected for trend and range. You refuse to accept it and just keep arguing, so please drop this line of discussion.
DeleteTJ
Either setting up the second leg of e wave or 3 of 3 of c
ReplyDeleteJack, it is recommended that you not get so 'locked on' a particular count. Yes, it is true that there is a single zigzag upward as shown.
Deletehttps://www.tradingview.com/x/TR7k6jke/
But the Principle of Equivalence states that could ALSO be 1) the first three waves of a Flat, if the down wave gets to 90%, or 2) the first wave of an upward diagonal, or 3) less likely, but still possible, a double-zigzag or triple zigzag higher. ONLY taking out the low or the high provides more information.
In short, "three-waves" can be deceiving, especially if they are this short in time compared to the whole down wave.
TJ
..also, even the just the first leg of a triangle (if other legs prove it out). TJ.
DeleteNoticed that wave V down is not a divergent low.
Delete@Roy C. correct on cash; have a gander at hourly futures from the high.
Deletehttps://www.tradingview.com/x/sw88Ur3L/
TJ
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DeleteMy guess is ABC with C up next. FWIW they held the falling wedge structure on the hourly chart on Futures (so far).
ReplyDelete6060 is the 18ma on this SPX chart, so probably overshoot it (if this is correct). https://www.tradingview.com/x/nBM6Zmmk/
DeleteNDX quarterly chart count still in focus - https://ibb.co/ccJBxbLJ
ReplyDeleteThe German Dax is at a critical point tonight. If it breaks down then a possible double tip or a failed 5th wave.
ReplyDeleteGOLD (GC) Futures Daily: of interest, daily GOLD is now trading below the 18-day SMA with a lower high and a lower low, and a longer wave down than the previous one. The daily slow stochastic has lost its embedded status.
ReplyDeletehttps://www.tradingview.com/x/OkpSn2mB/
Still the down wave 'may' count as part of a diagonal and is very difficult trading due to the whippy nature, so far. Exercise caution.
TJ
..next up is to watch if the down (red) fractal at 2887.6 breaks lower or not. TJ.
Deletekerpowie.. GOLD breaks 2,880; the down (red) fractal has been exceeded lower. TJ.
Deletehere is the chart with the fractal break lower.
Deletehttps://www.tradingview.com/x/gkAG4GwY/
TJ
Reminder: additional econ reports at the top of the hour. TJ.
ReplyDeleteUnited States Pending Home Sales (MoM) came in at -4.6%, below expectations (-1.3%) in January (From FXStreet.com).
DeleteES 1-hr: note there is a 90% wave downward. It 'can be' the b leg of a Flat or start of next impulse downward. There 'appears' to be a parallel, if it holds, and an upward overlap of a three-wave structure already.
ReplyDeletehttps://www.tradingview.com/x/y2Kyx3xA/
TJ
https://www.tradingview.com/x/0Pq7FyjS/
ReplyDeleteI hope it does evolve into a contracting triangle, then we'll know it's a B wave and not a 2.
DeleteES Daily - now approaching lower dotted trend line of potential triangle. Not there just yet.
ReplyDeletehttps://www.tradingview.com/x/OmdPUUzm/
TJ
SPY 15-min: IFF it's a minute ⓔ wave; then I think it counts like this with a very, very large triangle for a wave iv, that does not overlap the first wave down.
ReplyDeletehttps://www.tradingview.com/x/zhaMEBxQ/
The alternate counts are 1) a 'b' wave down, not easily countable, 2) a larger diagonal down.
TJ
This was my original triangle but I can also see this as a C of triangle. Time will tell
Deletei see this from top
ReplyDeletehttps://postimg.cc/bZ99Z0d8
in 1 of C or 1 of 3 off high
? Why would you want to see 2 as 'less than' 38.2% which the peak on the 26th is ? That just tends to defy logic. TJ.
Deleteyour right i rsuhed and put wrong degree 2 that shuld be ((2)) and 2 on the 26th, thus the comment is also skewed as well.
DeleteI have us in iii of 3 of C of IV. I thought your ii (2 on chart) might drag into today, but it likely ended late on 25th. Another week to go to finish C?
DeleteA new post is started for the next day.
ReplyDeleteTJ