Yesterday, we counted only three-waves-up to a lower high in the cash market. This suggests a leg of a triangle or diagonal. After some initial price moves higher for the futures last night on the re-opening of the U.S. Government, prices subsequently headed lower, and down through the 18-day SMA. The daily chart of the ES futures is below.
The close of today's bar will likely be in the lower fourth of the bar - which represents weakness. During the session a prior cash gap up was closed. Still, by the end of the day we could only count another three-waves-down. So, a lower low would likely be needed in the next two days in order to claim an impulse formed lower.
IF prices continue lower, then the lower daily Bollinger Band is still a target, and, if that is significantly exceeded lower, then the 100-day SMA would be the next target.
With today's three-waves-down, there is a low probability of a triangle to this point since all the legs since the high on 09 Oct can be counted as three-wave sequences. But the look and the measurements are not the best for a triangle. Still, if that's what happens, we'll accept it. Otherwise, we continue to count downward.
For now, the daily bias is still down, and that should be respected until and price closes over the daily 'line in the sand'. Intraday, the market has not even yet closed up over the 18-period SMA on the half-hour chart.
So, this could be whippy action requiring patience and small positions (if any) until the market makes a few more local decisions.
Have an excellent start to the evening,
TraderJoe
Investors Chart
ReplyDeleteCash Dow- Daily- With wave 1 as the extended wave.
https://i.postimg.cc/Bb8gTZWG/Capture111325.png
Ideally, wave 5 will end as some kind of diagonal, as an indicator.
Just bear in mind that it violates Neely's suggestion that a line from 0 to 2 should never cut off any part of wave three - because otherwise the line is saying wave 3 is not the one with the greatest momentum. TJ.
DeleteIt's another example of why Neely's crap doesn't work.
DeleteThe only other way to resolve this is to count the entire wave as an abc. I just can't do it.
DeleteSo I tried an experiment. Neely is known for using line charts only, which he constructs from the 'high and low of a period, plotted in order'. I wasn't willing to do that tonight, but what I did do was 'sample' the wave differently - just using the weekly closes. And voila! Looks close enough to me.
Deletehttps://www.tradingview.com/x/T35e7JEV/
TJ
That's a winner!
DeleteNo change in the count required. Amazing.
DeleteI may have asked this before, but does Neely's suggestion apply to X1 impulse wave or did he not address this. Thanks
ReplyDeleteHe made no distinction. TJ.
DeleteDouble bottom in QQQ?
ReplyDeletehttps://www.tradingview.com/x/FRwT1zyg/
Or maybe just the end of (i) of (c)?
DeleteOr 4 of i of C?
DeleteWe're running out of time for a big down here. The big boys will start front running the year-end cash flows soon. A.k.a. "seasonal strength".
DeleteYou mean like 2018?
DeleteEvery Friday is like this - until it isn't.
ReplyDeleteThere is a new game in town ... the TOPT ETF, the top 20 U S market cap stocks. It's heavily weighted to big tech (~48%) , but also includes a good chunk of finance and big pharma. It is steadily pulling away from the DJI due to the enormous buildout of AI infrastructure that is underway and appears to be accelerating. The recent correction has brought this index down to its lower BB. It does not appear that Trump's mismanagement of the U S economy (tariffs) has slowed these companies down. And now tariffs are coming off bananas and coffee and stimulus checks are being touted. The Epstein files affair is fun to watch, I have my popcorn ... but it doesn't affect Microsoft's capital spending. Maybe the correction is done.
ReplyDeletehttps://www.tradingview.com/x/XDoZ5PHj/
Sales job, eh?
DeleteNo, I don't work for BlackRock.
DeleteYou don't pay any attention to the Blog owners Purpose and Ground Rules either.
DeleteWhat's even worse, the chart didn't log the Nov fractals. TJ.
DeleteMy main point is … why bother to analyze waves in the DJI any more when it no longer accurately reflects what’s happening at the top companies in the U S economy?
DeleteIt's debatable whether 'any' equity index 'accurately' reflects what's happening at the top companies in the U.S. economy. Indexes can just reflect investor and speculator's 'views'. They don't match company performance dollar-for-dollar. Rotation is a well-known phenomenon. Some sectors come into favor; some go out of favor. So, what's 'accurate' as you put it is likely in the eye of the beholder. TJ.
DeleteFor ex, we could see a zigzag down in the DJI when it was a flat in the TOPT; or a regular flat in the DJI when it was a running correction in the TOPT. If so, then conclusions drawn from the DJI would potentially be misleading.
DeleteA new post is started for the next day.
ReplyDeleteTJ.