The ES daily swing line has wobbled a bit but has not set a clear new downtrend yet. Prices on Friday overlapped the prior high but not by enough to draw any firm conclusions yet. The daily chart is below. Prices retreated from the area of the upper daily Bollinger Band as expected, especially given the daily slow stochastic is over-bought only (for two days). The third day needs to be watched closely to see if gains the embedded status or not.
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| ES Futures - Daily - Into Minor B |
Meanwhile, two other overlap levels are shown which are of interest in ruling-in or ruling-out counts. In particular, we note that if L#2 is exceeded it would probably be below the 18-day SMA and might set a trend.
In terms of an EW count, we still see the Minor A wave at the July high, and the new August highs confirm that the early August drop was only a three-wave sequence (probably ending in the diagonal we counted).
Again, we have no proof positive upward movement is over. It is possible for a Minor B wave to form in numerous ways including: an expanded flat, running triangle, or even more complex Flat-x-Zigzag, Flat-x-Triangle. Those patterns are in the book for a reason.
Have an excellent start to the weekend,
TraderJoe
If a flat is unfolding wouldn't the current wave up also have to be counted as a three?
ReplyDeleteThere is a :3 by the up wave, too. May not be completed yet. TJ.
DeleteIndeed! Where the heck did I put my glasses? 😁
DeleteGranted every apparent reversal in market these days seem to be negated with laughable predictability, we do appear to have an intact island reversal in small caps and an exhaustion gap in Nasdaq. We also happen to have an H.O. (Hindenburg Omen) on the clock
ReplyDeleteTachyon, where do you get your Hindenberg info from. In the old days, I used to calculate it but I became lazy. TIA
ReplyDeleteQuite a tedious exercise in need as the parameters are strictly defined and one has to look at a lot of data. I get my triggers from Robert McHugh. His site will often post in the public section when omens are triggered.
DeleteStockcharts.com uses the following symbol for the Hindenberg Omen on the NYSE. Symbol:
Delete!BINYHOD
As far as I can tell it's the one David Keller, CMT uses in this video. He requires it to fire twice over a period of time as described.
https://www.youtube.com/watch?v=Ek3wj00jknI
TJ
The HO was triggered on 7/31 and 8/11.
DeleteThanks to TJ, Tachyon and David for the H.O. info. Forgot about McHugh's posts. Used to have a sub with him... So, if we have 2 H.O.'s within those 2 weeks as David says.... it's confirmed. It's an odd indicator, as no crash has occurred without (so they say) and it's something of a dinosaur. Most ignore or don't know about it.
DeleteES futures 1 Day - overlap L # 1 has occurred today. This is not 'fatal' but it rules out certain upside counts.
ReplyDeletehttps://www.tradingview.com/x/kBp3nh3s/
Meanwhile, the daily slow stochastic still has the 80+ level.
TJ
Something previously discussed on this blog: is how do we make sense out of a market (S&P 500 Index), which continues to advance, yet seems to be doing so in complex 3-wave patterns - and stubbornly refuses to trace out clear impulses? 😹
ReplyDeleteSo I took a stab at just counting what I see, giving up on trying to count any kind of ordinary impulse from the lows on 7 April of this year. What I came up with is some nested, overlapping, 3-wave labels (mostly some kind of expanded flat type of patterns). It looks ugly, and I think that anyone who has tried to trade this market recently would agree that _IT IS_!
Here's a link to the chart for your ridicule and condemnation:
https://www.tradingview.com/x/N7DSLhJH/
It's not for me to condemn but the 'rules' simply do not allow 'three-wave' A waves like the one leading to the first week in July, without a subsequent 90% 'B' wave retracement. Your 'B' wave is much, much less than 90% of A. If you are going to have multiple three-wave sequences without 90% retraces, then they must be labeled as a-b-c-W-a-b-c-X-a-b-c-Y, etc. So, the chart is what I call a 'cartoon'. It is just numbers and letter placed without regard to the rules of EW. TJ.
DeleteHello TJ, thanks again for sharing your method and insights. Any technical guideline preventing us from saying that the rise from Mid April is the B wave of wave 4? If I missed a post, just reply with the link. Thanks psychologically if feels like a B wave.
ReplyDeleteThe evidence against it is the Dow & the Russell. They have already overlapped the 2021/22 high, wave (1), downward implying diagonal structure. So, the odds 'favor' we are waiting on the final A-B-C for (5) and have seen the low for (4) in April of this year. So, what would be the point of an expanded flat in the SP500? The (4)th waves in diagonals are by 'rule' never Flats. They are always zigzags - which the current count is.
DeleteFurther, since some or all of this wave 'can be' counted impulsively, we must do that until we cannot.
That said, it does not 'rule out' that the SP500 and the NDX are doing something different, but it does dramatically lower the odds (like <5% in my reading of things). Here is a link on the Dow chart.
https://studyofcycles.blogspot.com/2025/05/dow-follow-up.html
TJ
Thanks TJ: you have a convincing technical argument and one more item to keep in mind when we are in diagonals. Thanks
DeleteRemarkable divergences in play. NDX has taken out the August 11 low. YM has yet to take out the spike low of Sunday night. Market makers not happy, lol!
ReplyDeleteDivergences ..
ReplyDeleteA new post is started for the next day.
ReplyDeleteTJ