In the prior post I referred to further analysis this weekend. That work is below and what is shown are the three-touch trends lines on the NDX with all the available historical data. The crux of this count is that we know the SPX made its low in March 2009, but the NDX never made the lower low. So, perhaps that wave is a truncated zigzag in the NDX. That's just a zigzag where the C wave (Ⓒ in this case) never quite makes the lower low. But the truncation would be a harbinger of the strength of the significant up wave to follow. The six-monthly close-only log chart of the NDX shows this as follows.
So, the alternation in this case might be two-fold. First, there would be a truncated zigzag versus an expanded flat. Second, there might be the alternation of "long-Ⓐ, short Ⓒ to short-Ⓐ, long Ⓒ". Note that the current Ⓐ down looks a lot like the prior Ⓒ down on a log scale. That is not proof positive, but it certainly is curious.
A second attribute of this count is that it might explain three current anomalies in the recent up wave. First is the fact that 1) the current up wave is extraordinarily difficult to count, 2) the Dow has not made a longer wave up yet. It could, it just hasn't yet, and 3) the Dow does seem to be vibrating around the 1.618 exterior retrace on the down wave. (See chart as this LINK).
None of these criteria are necessarily fatal for the Dow. Enough market experience has shown the Dow can wander on its own for a while if it wants. But, taken together, and in view of the possible form of the NDX it must cause one to raise an eyebrow. Recognition of this for months prior is why I am sincere when I say, "there is no amount of downside that will surprise me". This is true even as we patiently count to see what the local direction is.
This is the second post this weekend, and if you have not seen the first one yet, you might like to read it now.
Have an excellent rest of the weekend,
TraderJoe
That RSI is ugly
ReplyDeleteFrom this post.
ReplyDeletehttps://studyofcycles.blogspot.com/2025/03/patience-patience.html
I find it interesting that on both of these charts, I have the same question as an Elliot practitioner. Is the whole thing a diagonal or is it an ABC with the diagonal as the C wave?
On the 3 month sp500, we could either by in a expanding diagonal as TJ has reported or only completing 1 of a contracting diagonal if it wants to chew up more time.
On the yearly we have not had a triangle or diagonal to suggest an end of the move from early 40s [II].
On the monthly, I simple see an impulse I call the QE wave from 2009 till Fall of 2018, than the covid flat, and now the covid response wave with 3 waves so far.
On a fundamental note, it is the most expensive market of all time. I completely agree with Stan Drunkenmiller on this, liquidity first, stock selection second. If we throw more money at the economy, new highs would be a safe assumption. I do not see this on the horizon at this time.
I lean towards the ABC idea because the 2's of the diagonal would retrace towards an area that is more common for diagonals.
Thanks!
One scenario that many forget is that maybe we're "fighting the last war". That wave ⑤ already 'ended' as an impulse at the 2021/2 high. This impulse would have ended after the flat or expanding triangle wave ④. The down wave in three waves could be a short Ⓐ wave which is too short in time and price in and of itself to correct any of the prior waves, and so the expanded flat is needed to complete the job. That 'might' explain the short length of the Dow if we do not go sufficiently high enough over the top to make a longer wave. It might also explain the NQ downward overlap, but not the ES, etc.
DeleteThat said, it is not possible to take the diagonals off of the table yet.
TJ
How would you have a flat fit into the yearly count. Would it still be part of V or a weak start to [IV]?
Delete'probably' the weak start to [IV], like cycle a of SuperCycle [IV]. TJ.
DeleteES (SPY/CFD) - there are some awfully nice Fib ratios here. Watch the parallel channel and the gap.
ReplyDeletehttps://invst.ly/19f0t3
If a turn up is going to happen it should result from a scenario like this.
TJ
The ratios are 1) 62% from low to high, and 2) 1.618 x Ⓐ in the Flat that went marginally over the highs. TJ.
DeleteBack inside the 2hr ES wedge tonight does not look particularly strong.
ReplyDeleteHanging on the bottom to much for my liking as originally drawn. Maybe it needs more time.
Deletehttps://imgur.com/my2wYF0
Watching for failure as well.
DeleteSpy 30 min. Looks like the specialists are up to their dirty tricks again. Taking it hard down to shake off the longs from Friday's low. They'll soon take it up with gusto.
ReplyDeleteoops
Deletefyi only - NYSE adv / dec = 952 to 1567; not even 1 : 2 and less than previous days.
ReplyDeleteTJ
SPY 1-hr: either outcome looks ok; a lower low can still be in a diagonal. A rally could end the prior described diagonal. TJ.
ReplyDeleteSPY 1-hr: does have the new low.
Deletehttps://www.tradingview.com/x/928b89Yu/
TJ
Still thinking this is WXYXZ. We are finishing the Z to 5500
ReplyDelete..and what does a WXYXZ get you? In other words - what comes after? TJ
Deleteit gave me a good trade on aapl. I know I don't follow the rules but so far I just keep seeing abc's downward. I understand it can be leading diagonal. I'm switching to that now because I don't think there will be much bouncing.
DeleteSPY cash 1-Hr: to maintain the diagonal shape, this leg must maintain price over the level of 558.39, as below.
ReplyDeletehttps://www.tradingview.com/x/wFyrxzaI/
The clean invalidation point could be useful in the future. It could suggest the end of (v) of the diagonal, or a continuation of the breakdown of the wedge.
TJ
Should almost be time for "spin the tariff wheel".
ReplyDeletefyi - NYSE adv : dec = 919 to 1,835 or just about 1 : 2 and still pretty tame. TJ.
ReplyDeleteES - Daily - as far as I can tell, all upward waves in the prior upward wave set have now been downwardly overlapped with today's lower lows.
ReplyDeleteTJ
ES Daily - this was the last upward overlap level on the ES roll-over contract; even worse on the lead-month contract.
Deletehttps://www.tradingview.com/x/vMBKxSru/
TJ
..also filled the roll-over contract 'gap'. TJ.
DeleteES 1-hr: diagonal broken to the downside and likely converting to impulse or (less likely, Flat). TJ
ReplyDeleteSPX Daily. With trendine drawn thru 3 daily closes. Note the 50% retracement from Red A above.
ReplyDeletehttps://i.postimg.cc/7Z84vHS5/SPX3-10-25.png
Thanks Tj. Spx August 2024 high 5566.16.
ReplyDeleteChurning is slow and steady so some underlying systematic issue which we don't know.
ES 2-hr: here is the count I have so far. No real good sign of wave iv, yet, within this down wave.
ReplyDeletehttps://www.tradingview.com/x/YqgpWe7A/
TJ
ES weekly EWO and recent down move has look of a 4th wave ending
ReplyDeleteno, that's just not right. As the link below shows, the peak EWO on the ES weekly is 519.23; the guidelines for a fourth wave are +10% to -40%. That means the EWO needs to decline to ~52 at minimum for that statement.
Deletehttps://www.tradingview.com/x/t10ZrB5v/
It is currently at 96.5, and so I don't know where your statement comes from.
TJ
It will be at the level when next bar prints on next Monday open I'm pretty sure.
Delete..and so what? as I wrote earlier "every single upward wave in this wave set has already been overlapped downward". TJ
DeleteNot about markets but the science.
ReplyDeletehttps://www.earth.com/news/quantum-fractal-pattern-predicted-50-years-ago-observed-in-lab-hofstadters-butterfly/
Trader Joe, do you see any reason why this entire recent decline in the S&P 500 Index (since 19 February) cannot be counted as a single bearish impulse, so far?
ReplyDeleteI post my naïve chart here, for your criticism: 🕊️
https://www.tradingview.com/x/PiGe4lUF/
And I note that in this count, wave (iii) is actually longer [253.5] than wave (i) [238.94], which I think allows wave (v) to extend. The Elliot Wave Oscillator also seems to be hinting at the third wave signature, also.
Yes, you have problems with that: 1) the futures have too many overlaps for that consideration as in the first link. But I said yesterday I could see a way to extend into an impulse. It is on the same chart.
Deletehttps://www.tradingview.com/x/1B70Y9uy/
2) the first retrace is only a schosh over 38.2% as below. This 'might' indicate wave 1 is the extended wave in the impulse, as the futures suggest.
https://www.tradingview.com/x/e7A9CDc1/
TJ
Thank you TJ. 😊
DeleteA new post is started for the next day. Enjoy courtesy of EWI.
ReplyDeleteTJ