The interesting features of today's daily ES futures chart are shown below. As most know in the after-hours last night a number of tech stocks were affected by earnings news. That contributed to a gap down in the cash markets. For the futures, it resulted in a lower low day, as below.
The lower low day turned the swing line lower and made a pattern of a lower low and lower high. The problem is that this pattern is still neutral as the pattern is over the 18-day moving average of closes. The bias is up until it isn't. But as we suggested one of the two futures gaps did close today.
Further, price got very near to that 18-day average, and almost tagged it, as the embedded status of the slow stochastic was lost today. The only day it can be gotten back (without rebuilding the whole three-day sequence) is tomorrow.
Another observation of this market one can make is that the New York Composite Index (NYA) did not make a higher high in mid-to-late October as did the indexes that include the Mag-7 stocks, as below.
This is a very telling intermarket divergence that should be respected until or unless it can be shown to be broken. This index has the classic look of a B wave that rises to 90 - 100% and has since headed lower.
Have an excellent start to the evening,
TraderJoe
ES 1-hr: nothing is proven yet - even with the overnight drop which either made 1.618 if you use the prior high in ii or didn't make 1.618 if you use the failure terminal in ii for the anchor point.
ReplyDeletehttps://www.tradingview.com/x/elMkhmbt/
It looks like it's getting a fourth wave signature in about 106 candles, but it could turn tricky again and just be the a-b-c of a first wave of a diagonal. So, I'll tread lightly.
TJ
Glad to see those parallel lines.
DeleteReminder: PMI and ISM's still scheduled before the top of the hour. TJ.
ReplyDeleteES/SPY (CFD) 1 Hr: using the CFD now getting the EWO peeking above the zero line. Either the fourth wave holds or it doesn't.
ReplyDeletehttps://www.tradingview.com/x/MRmebBA6/
TJ
There is now upward overlap. So, if there is a downward wave, it will be likely by diagonal, with the first three waves a,b,c of (i). TJ.
DeleteES Daily - lower low this morning keeps the swing-line down. Higher close and over the 18-day SMA keeps the bias 'up' . As of the cash close the daily slow stochastic did not recover the lost embedded status.
ReplyDeletehttps://www.tradingview.com/x/Ekk79dqc/
The lower low this morning created overlap on the 15 Oct high. This eliminates quite a few upward count possibilities. If a downward wave is made it might occur as a diagonal. Upward diagonals (expanding?) do not appear to have the correct internal structure and are not being considered at this time.
Most like today represents the "battle-at-the-line-in-the-sand".
Have an excellent start to the evening,
TJ
ES/SPY (CFD) 30-min: from the intraday wave-counting-screen. The overnight low was exceeded lower. So, there is a lower high and a lower low. If the overnight high can hold, then we might start down in the third wave of a diagonal.
ReplyDeletehttps://www.tradingview.com/x/PBcSAI3U/
TJ
Here are some additional landmarks. Downward, there is already overlap. Below 6,770 futures, then an upward expanded diagonal is ruled out (shown in red).
Deletehttps://www.tradingview.com/x/FskLPye9/
TJ
Now below the level to invalidate an upward diagonal.
Deletehttps://www.tradingview.com/x/6wi2DJy2/
TJ
A bit premature but can we be making a triangle with previous high B of the triangle
ReplyDeleteBear trap, C of B to test 6900 level next. It's a rodeo.
ReplyDeleteRoberto, while I understand the sentiment of it being a rodeo, it would help if you would illustrate your ideas with a chart, so I and others understand what you are thinking. We simply cannot be expected to read your mind. TJ.
DeleteES 30-min: new low over yesterday's low in another sign of a potential diagonal.
ReplyDeletehttps://www.tradingview.com/x/TmnWQ62I/
TJ
If that is just the C down of wave 1 that thing is YUGE!!
ReplyDeleteTachy .. it really would help if you would calm down and start showing some counting. Nothing has changed in this count, but this is all I can wring out of it at the time, using the actual measurements. Where you get c of 1 from, I don't have a clue.
Deletehttps://www.tradingview.com/x/eSVOfM9w/
Please, please, please 'look' at the count. Try to do the measurements yourself and try to follow along as best as possible. Thanks always in advance.
TJ
I will do my best TJ.I was trying to count a diagonal three wave down.
DeleteRight, it's already there unless this down leg turns into and impulse, then it would be 'a' of (iii). Or, unless the 100% Fibo marker upward at 6,816 on the CFD is taken out first and invalidates the diagonal. TJ.
DeleteWas I incorrect in the counting an initial ZZ down as 1 of a larger diagonal? That was my initial assumption. Thx for feedback. Much appreciated!
ReplyDeleteI can't tell, unless you show the chart. TJ.
DeleteTJ, could 1- 2, 1-2 be in play from the top?
ReplyDeleteUsing ES hourly, I don't see how; there are too many overlaps, and the up wave on the 5th is much longer than the up wave on 30-31st. Further, there is overlap of the 5th with the 30th. So, you'd have to propose how because all the rules of impulse wave formation and definitions of degree labeling are broken in that scenario. If you want to take a shot at it, I'll look it over. TJ.
DeleteThe degree violation alone cans it for me, thanks.
DeleteSPY/ES 5-min short-term / overnight. Late in the day towards the close, there was downward overlap as shown in orange. But there was 'not' a new low, or even a low beneath the prior low. See chart.
ReplyDeletehttps://www.tradingview.com/x/ccLgLTTE/
So, the two parallels show that a downward impulse is definitely a possibility. But it is not complete yet. With the Congress 'possibly' reaching a deal to re-open, one has to mind their stops carefully if in the market. No matter what the form of the potential downward wave it cannot travel above the wave-counting-stop shown at 675.75 (purple) or its equivalent in the futures, without invalidating the downward action.
One can make the argument that a low probability expanding diagonal upward count could occur, provided that 669.13 is not taken out lower first.
So, watch things carefully if in the market. Because of the position of current price in the market, very near the low (and arguably poor trade position), I personally prefer to sit this out and watch how the overnight develops.
TJ
A new post is started for the next day.
ReplyDeleteTJ