It's getting thin up here in the SPY (cash) ETF contract. Volume is seriously declining as prices are rising. Sure, there could be a couple more days up. The question is, "is it worth the risk?"
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| SPY (Cash) ETF - Daily - Versus Volume |
At least some bulls are apparently thinking, "maybe not". And what do the bears think? Try to find one to ask one.
Have an excellent rest of the evening,
TraderJoe
To describe the “supercycle top candle,” it’s often one of these:
ReplyDelete1. Blowoff / Exhaustion Candle
Huge range.
Gap up.
Big media excitement.
Closes off highs.
This is the cinematic version people imagine.
2. Repeated Small-Bodied Candles Near Highs
This is more common than people think.
Tiny candles.
Low volume.
Weak breadth.
Grinding advances.
The market keeps rising but “energy” fades.
3. Failed Breakout Candle
New ATH.
Momentum traders pile in.
Then reversal back below breakout level.
Very dangerous psychologically because it traps late buyers.
4. Outside Reversal Week/Month
At secular tops, the monthly chart can matter more than the daily:
* new highs early in month,
* sharp reversal,
* closes below prior month.
That’s often more meaningful than a daily hammer.
⸻
And importantly:
A hammer is usually bullish after a decline.
At tops, the bearish cousin is more often:
* a shooting star,
* gravestone doji,
* or bearish engulfing pattern.
But even those are unreliable at secular extremes because liquidity/mechanical flows can overwhelm classical chart patterns for surprisingly long periods. The deepest truth about supercycle tops is: they are usually processes, not events.
Distribution takes time.
As Galbraith wrote about 1929 in The Great Crash 1929:
“The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil.”
On Everest, once you reach the summit, every route to safety leads downward.
DeleteJKG was far too kind. After all we are not just talking about an absence of responsibility, we are dealing with outright fraud and corrupt criminal conduct on a global scale. Derivatives and dark pools now estimated to be 600 to 700 TRILLION...! A tad more than merely "irresponsible". Don'cha think?
DeleteYes I know another bear: all you guys check Keith Richards owner at valuetrend.ca
ReplyDeleteHis “homemade” technical signal based on multiple indicators is at 0 right now: highest risk level.
He also takes into consideration EW counts!
Transports are declining again today…
Looks like DJIA will finally notch its own new ATH
ReplyDelete. THAT should be the final signal imo.
I do not think the DJIA will make new highs. In 2000, the Dow top two months before the Nasdaq. The Dow has been struggling since Feb. Momentum is dead.
DeleteDow on an ED?
ReplyDeletehttps://schrts.co/RtJFyRNG
Tj. Is thr any condition in EW to fill the gaps in on a short to medium term time frame. E.g Nq/Es from March 30th has a lot of unfilled gaps. Also on a longer time frame does the gap created in March 2009 -666 or Covid low -2191 has to be filled ?
ReplyDeleteTo my knowledge, Elliott Wave Theory does not address "Gap Theory".
DeleteI think that analyzing close to open gaps in market charts is a different approach in "Technical Analysis".
That being said, from what I have read from practitioners of Technical Analysis, there is a tendency for chart gaps to be filled, sooner or later.
DeleteBut this is in no way a hard rule. Some gaps are never filled, and the market just moves on.
I would surmise if a gap that distant were to be filled, it would take a Super Cycle
Deletedegree wave to accomplish the feat!
manu ... you are such a lazy person in the way you think I should not answer this question for you. The ES has only 'two' gaps since March 30th. I use only 'close-to-open' gaps. They are shown on this link. The one at the top has already been filled by this morning's down action.
Deletehttps://www.tradingview.com/x/5VgEedoe/
That leaves only 'one' unfilled gap on the chart. That is not 'a lot' of gaps as you write in your comment. Mental laziness. You won't do the work. You won't count. You won't show your work. It makes me wonder, "why does this guy even give a rat's ass about a measurement-based system like Elliott Wave, when he won't put a ruler to a piece of paper?" So, I am very, very disinclined to answer your questions in the future.
Next, the one gap that remains would be filled by a 23.6% retrace or more. That is just one thing about what Elliott Wave has to say about gaps. If the market cannot retrace 23.6%, and cannot fill the gap, then it is still likely still in a very 'strong position' and still in an uptrend.
I have a lot more to say about EW and gaps, and HG is incorrect. For example, considering wave 1 & wave 2, then IF the first wave is 'not' the extended wave, then, the wave 1 'mid-point gap' is 'likely' to be filled by a 50 - 62% retracing wave. Again, if it isn't then it likely indicates, 'strong market conditions'. That is pure Elliott Wave. HG is not exactly correct in his comments.
Tachyon has 'some' element of truth on the longer term. It depends on the degree of the wave. But he didn't quite say it that way.
Does any one reader on this site want to try to spread their wings and 'really' explore what this theory about? Can you stand up to even the 'slightest' of objective criticism - without which an apprentice of Leonardo's would not have even learned to paint? The choice is all of yours.
TJ
Bond Yields!
ReplyDeleteES/SPY (CFD) hourly - the overlap warning has fired. The next marker down would be the invalidation of an expanding diagonal.
ReplyDeletehttps://www.tradingview.com/x/KyZ2bc2G/
TJ
... the 'most common' outcome is for the wave to fail. But if the market is bound and determined to put in a diagonal top, EW permits it at present. Who will buck the odds? TJ.
DeleteES 5-min down wave since 10:15 am qualifies as an expanding diagonal, possibly an a/i wave. TJ.
ReplyDelete...potential diagonal invalidated upward; count it likely as a tzz 'b' or 'x' wave.
DeleteTJ
ES/SPY (CFD) 30-min: From the intraday wave-counting-screen - bumping up against the upper band. Maybe a parallel wants to play out; maybe more.
ReplyDeletehttps://www.tradingview.com/x/FI5TFGBQ/
TJ
...now back to intraday 18-per SMA in over-bought zone. Note: see dotted line below S2; that would invalidate a contracting diagonal upward.
Deletehttps://www.tradingview.com/x/n0cxuKjV/
TJ
...contracting diagonal has just invalidated also, leaving the market in a weaker position, at least temporarily. TJ.
Delete...and ES has a new low in the after-hours. TJ.
Delete...downward wave in ES is now >90% of the upward wave. 'Not impossible' but 'typically' upward expanding diagonals don't survive the 90% level. Also, it would be hard to say the intraday bias turns to positive until/unless price gets back up over the intraday 18-per SMA. TJ.
DeleteYup! Hilarious how they low-balled contract bids all day until right before the close...wiley! Have a great weekend everybody!
ReplyDeleteA new post is started for the next day.
ReplyDeleteTJ