Tentative steps were made today to close the gap we wrote about in the prior post on the ES daily chart, below. Today made a lower high and a lower low as shown.
Also of interest, there have now been four consecutive closes below the 18-day SMA, and the daily bias is said to have shifted to downward.
Markets have a funny way of getting to their Bollinger Band or moving average targets, particularly in an environment like this where a news story or a bad key earnings report or a worried hedge fund manager gets the heebie-geebies and decides to unload can quickly and significantly affect the price level, and the algos keep trying to pull things back to make it look like nothing actually happened.
So, in the above chart is there a way to be in a triangle? I think so, but a triangle is atypical with a gap at the low (not impossible, just atypical - or lower odds).
Are there ways that the market could get back down to the lower daily Bollinger Band, to close the gap, and or get down to to the 100-day moving average of closes? I think so, because large gaps in the futures typically fill a bit faster than those in cash, and it is very common for prices to find the lower daily band or their key moving averages.
We'll try to count it internally as best as possible, but we still need some key levels to break to have an understandable count. And, keep in mind, failures can occur. We're pretty sure we caught one this morning, and there may be more to come. They are a sign that the opposite movement wants to happen with some dispatch and length.
That said, you don't need me to tell you that when you put in an order than you think has momentum behind it, the algos go haywire - like you violated a commandment or something - and instantly yank on it back & forth until it almost drives you crazy. And the only way I know to even try to mitigate that is to watch positioning. Trying to initiate late in a move can have serious adverse consequences. We're likely all feeling that as the market seems to be making three-wave Elliott Wave structures. It might continue to do that until certain Smart Money players (and their algo-bots) are more convinced there really is a down trend under way.
That's why Ira invented the swing line indicator - to help determine if there is a real trend over or under the 18-day SMA.
Have an excellent start to the evening,
TraderJoe
The dip-buying algos have been very predictable and their owners have tremendous buying power, ergo the Kabuki Theatre of a 1000 point intra-day reversal in DJIA recently. This was a recovery from a futures decline of over 600 handles!! It continues to be a scalper's market, as some have noted, and those long candle tails have been bullish short term, but none of this is "normal", and most certainly not the way a healthy bull market behaves. "Someone" continues to sell these "rallies" with a vengeance. Sooner or later, the Kabuki Theatre will end. Looking like a final top in 2026 in the cards. Stay nimble. Have a great week-end all.
ReplyDeleteES/SPY (CFD) 1 Hr: I was suggesting there would be failures and 'running waves'. That did happen in the overnight with a "running" b wave triangle, then a massive down wave that was quickly retraced. I was also hoping for more length to explain some wave sequences. We got that overnight, too. Thanks to the "Night Shift". Prices headed down to the daily lower Bollinger Band - one suggested target - and then quickly reversed on more tariff comments. Here is the suggested resulting count.
ReplyDeletehttps://www.tradingview.com/x/YaF2IGeL/
If 1,2,3 is to be an expanding diagonal, lower, then 4 should be longer than 2, and it already is but could have another swing up for an internal 'c' wave of 4.
Very, very whippy. B waves are traded at one's peril, or lightly, or not at all.
TJ
Today AM was also the monthly OPEX so expecting it to be whippy. Does the 4th wave of the expanding diagonal need to be longer than wave 2 in time? If yes, the whipsaw from today will add to the time
ReplyDelete'Usually' wave 4 in the diagonal is longer in time than the time of 2. It is a 'guideline' and to be expected, but not a 'rule'. TJ.
DeleteBitcoin just lost major support at 110k. Gold finally recognized its froth.
ReplyDeleteES/SPY (CFD) 1 hr: looks like we are into the b wave of 4. It could be a wild-and-wooly one. It 'can' go over the high again as a 'b' wave if it is a flat or expanded flat. Don't know yet.
ReplyDeletehttps://www.tradingview.com/x/QAEAnKp0/
TJ
ES/SPY (CFD) - 5 min: down to prior 4th wave; possible diagonal; possible flat; can go over the high again if it wants as the count could only be an a-3 down. And there could be a b-3 up.
ReplyDeletehttps://www.tradingview.com/x/mOdbOMrA/
TJ
IF the count does not go over the high, then suggest moving v to the top wave, and maybe this was an a-5 down. Difficult to judge on a small-time frame. This is where part of the 'flaky' risk comes in to play in 'b' waves. TJ.
Delete..now back up to 90%+ of the prior high. Larger flat is legal if it wishes. TJ.
DeleteGOLD 4-Hr: here is a current KCT on Gold futures on this timeframe. It has already traded below 4,200 briefly. If it starts to print full bars inside the channel that would be a clue of something different.
ReplyDeletehttps://www.tradingview.com/x/5f9WLyP0/
TJ
ES futures 30 min: prior high exceeded; likely b-3, up, after a-3, down. TJ.
ReplyDeleteFriday end of day update. These market algorithms are doing an excellent job at respecting the contracting diagonal trendlines đ:
ReplyDeletehttps://www.tradingview.com/x/EtaXnDZm/
you draw as well as the bots ...đ TJ
Delete
ReplyDeleteES 1-hr: Keep an eye on Sunday night, Monday morning. As far as I can tell, a downward diagonal would invalidate above 6,750.50, so put the wave-counting-stop above 6,751. Let's see how close to the vest they want to play this, and how much time the wave will take. It's ripe for a short in time 'c' wave down, but there is not a good turning candle yet.
TJ
A new post is started for the next day. TJ.
ReplyDelete