Long-term readers of this blog know that for about the last five years the favored wave count proposed has been the Contracting Ending Diagonal (CED) to end Cycle V of Supercycle Wave [III]. We have posted; we have showed chart after chart. But, this week, for the first time you can actually see on the monthly log chart all of the Minor waves that may be involved in the Intermediate waves to make up the Primary waves. That is because this current wave, if it is correct, would be the Minor C wave in the count.
I don't know about you, but it is gratifying to me to see it. It is much better than repeatedly calling for tops that don't occur. So, here it is. On the chart. And Intermediate wave (5) is currently shorter - in log format - than is Intermediate wave (3) so the count has some merit. The invalidation of the Minor B wave did not occur, so this marker will be removed from the chart.
The next marker is the invalidation level of the pattern which is above 8,513. At that price wave (5) would become log longer than wave (3). And that would simply break the 'rules' for a contracting diagonal.
The price action this week actually feels like a throw-over. It's been gappy, non-stop, and very, very news related. Further, price is nearing both the upper daily and weekly Bollinger Bands, where the Smart Players often take some profits off the table. The technical indication on the monthly chart is that the PPO is diverging as the market is making new highs. The technical indication on the two-weekly chart is that the Elliott Wave Oscillator (EWO or AO) is diverging at these new higher highs after having signaled the fourth Intermediate wave (4) by dropping below the zero line with the requisite 160 candles on the chart. (Interested readers of this blog should verify this finding on the two-weekly chart).
So, this count is on track at present. But it could invalidate. It hasn't yet. But if it does, then the Elliott analyst just moves on to the next most likely pattern. As we have covered before this would be the expanding ending diagonal. But, right now, the subdivisions of those waves just don't add up in this pattern. Maybe they will at some point. They just don't now.
So, we are faced with this staring at this chart and wondering, "Hmmm?". It isn't yet a great idea to act on this uncertainty. The first confirmatory indications would be 1) significant reversal candles, 2) filling of up gaps, and 3) price closing below the 18-day SMA. Maybe this would be accompanied by a covering news story. Maybe not.
For now, it is enough to see the picture and to wonder, "just how in the world did this get here"?
Have an excellent start to the evening,
TraderJoe
All the characteristics of a "C" wave...in SPADES...!!
ReplyDeleteTJ, I don´t think there is any overlapp between intermediate (4) and (1) on your chart/cash index..?
ReplyDeleteRegarding the expanding diagonal you mentioned, is this what you mean?
https://www.tradingview.com/x/s6CNWAIK/
I guess you also mean that SPX needs more upside to work in log chart, chart above works but thats in arithmetic.
Thanks
Erik
Hi. I have addressed the overlap in that the DJI, the RUT and the NQ 'did' indeed overlap. The SPX did not but missed by only a few points, and the Elliott Wave Principle 'rule' for diagonals says, 'almost always' overlaps. So, given that the others did, it is an argument in favor of the contracting pattern. But it is not proof certain, and therefore the expanding possibility also. TJ.
DeleteHere was the triangle I was looking at in /CL. The deep retraces and the EWO are knocks against it but I have seen uglier ones play out.
ReplyDeletehttps://imgur.com/QY99jBp
...still a possibility. TJ.
DeleteForget gas prices, 17 trillion and you cant even buy an ES impulse.
ReplyDeleteES/SPY (CFD) 4-hr: plausible current count within Minor C.
ReplyDeletehttps://www.tradingview.com/x/IXNjtUuA/
TJ
Zerohedge: Entire market is now one giant gamma squeeze: S&P traded $2.6 trillion notional of calls yesterday, all time high.
ReplyDeleteWe all know how gamma squeezes end.
DeleteNDX has the same pattern of spy, can you give your thought?
ReplyDeleteNDX would invalidate above 29,954, and if it does, we would change to the expanding pattern. Otherwise, so far, they are very, very similar. And this is an exercise you should be willing to undertake for your education.
Deletehttps://www.tradingview.com/x/D1B3LfNo/
TJ.
As I said, it's the same, thanks a lot
DeleteES/SPY (CFD) 30-min: there are 3 closes below the lower band, which starts dropping the odds to 2 - 5% of the next close below the band (not impossible, just lower odds).
ReplyDeletehttps://www.tradingview.com/x/vfh0mS9F/
TJ
If the reversal after the diagonal is sluggish and doesn't reach the start of Wave 2, the diagonal might not be finished; it could be evolving into an Expanding Diagonal or a more complex "double-three" correction.
ReplyDeleteIf this recent violent move up was all about insanely leveraged buying, which is my view, the unwind will be anything but sluggish...we shall see...
DeleteES/SPY (CFD) 30-min: close inside the lower band resets the number of consecutive closes below the band.
ReplyDeletehttps://www.tradingview.com/x/87EFR2TR/
TJ
I thought in the past you had said this was Super Cycle V
ReplyDeleteNope. Cycle V of SuperCycle [III], with a SuperCycle [IV] to follow. The up wave from 2009 is so strong it must be a third wave. TJ.
DeleteThat's a relief. I think. Did SC I end in 2000 and SC II end in 2009?
DeletePrice target at 4th wave on lower degree would be the Covid low. We'll likely get a torturous triangle for Cycle 4 for alternation. Lol!
ReplyDeleteI would think a sharp decline to offset the 30s running flat would get us back to 666, the four of lesser degree. I am not sure we are done with cycle v yet.
DeleteYikes! You are right. I forgot this is potentially a Super Cycle top!
DeleteDow refuses to make new highs. The month of May tends to produce massive selloffs. With midterm elections, the market tends to bottom in September or October. A sharp 50% correction between now and October is not out of the question.
ReplyDeleteMy contention is that the (1) on TJ's chart above and the move from 666 to now are mirror fractals.
ReplyDeleteWe have not seen an ending diagonal or a triangle on the yearly to give clues to an end to supercycle [III].
Both waves have similar characteristics and were both funded with massive debt/printing injections.
I'm thinking we are completing the first leg of a larger diagonal for cycle V. More shenanigans to follow.
Tj, Neely on March 24 did a EMERGENCY webinar and then on April 18th posted this count. I don't know how it is calculated but his webinar clearly mentioned that the bull market started. I understand you endorse Neely but the 20 year bear market was no way a correction. Any insights?
ReplyDeletehttps://www.neowave.com/tradingblog/blog.asp?bid=149
https://www.neowave.com/tradingblog/blog.asp?bid=203
There is no emergency. Stay calm. I don't endorse Neely, although some of his insights and individual techniques are good. Some are way off the mark. It's not about Neely. It's about whether 'you' can count & post a count in ES or hopefully some other market, otherwise future posts will go to spam, as many have already. Stop trying to be dramatic. Just count... boring old count. TJ.
DeleteA new post is started for the next day.
ReplyDeleteTJ