In yesterday's post, I said the area between Friday's high and the all-time high in the ES futures (or CFD) was a "risk area". A daily CFD chart is shown below. The cash market has not even opened yet. The Dow futures and the Russel futures are at new all-time highs. That suggests that if the risk-area gives way in the ES futures, then a very non-proportional count like the one below has to be considered.
Because a potential fourth wave, red circle-iv did not downwardly overlap, even though it is exceptionally disproportionate looking, the rules say it can be considered. Further (x) is shorter than circle-iii, up, so it works by degree labeling there, but how about that (y) wave down? It would be longer than minute-ii, circle-ii, the previous wave of one higher degree. And that is likely a violation of degree definitions. So, it's either 1) a second wave up still in the ES, or 2) this or 3) we'll have to later switch to a diagonal structure if a new higher high is made.
The problem is the (y) wave down can be counted as three-waves to a new low in the futures. It can not be in the cash market (SPY).
In the ugly fourth wave count above, circle-iv, then the fifth wave still is restrained by 7,607 as it would otherwise become longer than circle-iii, which would break the 'rules'.
So, things are getting good & ugly at near a top. That's the way they're supposed to be. A second wave in the ES has not broken yet. It could. Risk is risk.
Have an excellent start to the day.
TraderJoe
Thanks tj. All gaps covered in es from June 4th. Fed meeting on Wednesday. Expiry on Thursday. Interesting week ahead.
ReplyDeleteThey ALL will notch new ATHs imo. Historically and statistically by far the more probable outcome.
ReplyDeletelol, like anybody's going to trade YOUR opinion. Try producing something of value.
DeleteYM (Dow) Futures - 12 hr. Here's a stab at the Dow futures; they might not be quite done yet.
ReplyDeletehttps://www.tradingview.com/x/E4ZFNmoW/
TJ
Also counting a 5th up with closure of what I believe will prove to be an exhaustion gap signalling a probable top. Again looking for specific behavior of that initial wave down to confirm a high degree trend change.
DeleteWhat about the flat to downside we all saw in futures
ReplyDeleteI can't read your mind; you'd have to sketch it out and post it. TJ.
Deletehttps://www.tradingview.com/x/lm6GmYPp/
Delete..yes, Jack.. that is the one I pointed out too, but, the roll-over futures have gone over the high. So, not impossible but much lower odds now. TJ.
Deletefyi - ES (Sep) Daily - The SEP contract has made a new daily high. The CFD has not yet nor has the JUN contract. TJ.
ReplyDelete...correction, the SEP contract does not have a new all-time-high; it only has it in relationship to the roll-over contract, as below.
Deletehttps://www.tradingview.com/x/wGAV3kh4/
TJ
If this final wave up is being driven by global aspirations regarding a deal between Iran and the US, what happens when the CON becomes clear to even those suffering the deepest of mental torpidity??!! Of course we "know" news doest not affect the waves...:)
ReplyDeletePrice action is the only thing that matters, known only to the mentally clear.
DeleteP.S. I'm leaving room in this count in the fourth wave for an expanding triangle to mirror the expanding diagonal in the Dow.
ReplyDeletehttps://www.tradingview.com/x/uoSJai6S/
(Because there's more than one way to lose good money).
TJ
That'll make a helluva channel from the March 30 low.
Deleteyes, i see what you mean! TJ.
DeleteWhen things don't channel well for me in an impulse, I always look for an extended wave 1, or I'm actually looking at an abc.
DeleteI also believe the "sub waves of a wave" of a 33333 type diagonal could be 3's also.. I just know I've had trouble with channels for the past 6 years.
DeleteHmmmn...EWO very suggestive...!
DeleteES/SPY (CFD) 30-min: from the intraday wave-counting-screen; watch to see if the intraday slow stochastic loses the embedded status. Currently around 77.
ReplyDeletehttps://www.tradingview.com/x/3wNxcOjo/
TJ
SPY 5-min: interestingly, there is a wave in cash & futures, both that qualifies as an expanding diagonal down, as below. Wave ② did not go over the prior high in either cash or futures (2 ticks).
ReplyDeletehttps://www.tradingview.com/x/3upmBuPa/
While it 'could' go further, lower, be cautious with a wave like this because it can end a fourth wave. Try to watch for more definitive signs - like overlap, etc.
TJ
Just for practice. 30 minute SPY with afterhours "C" wave channeled.
ReplyDeletehttps://schrts.co/qRkKcMII
yep! TJ
DeleteSPY 5-min: again, another reason why the expanding diagonal can 'end' a pattern - even if it doesn't end a flat - is because it can be counted just as its three zigzags.
ReplyDeletehttps://www.tradingview.com/x/7iG0788U/
This is supposed to be one of the rarest of the wave patterns - yet here it is. Two ways to fail - one way to push lower.
TJ
ESP/SPY (CFD) 30-min: with six closes above the upper band (odds 1-2%), price came back inside the band, then lost the slow stochastic reading following the diagonal.
ReplyDeleteThe result was price and the intraday 18-per SMA came together again. This did overlap a previous up wave but is not fatal yet.
https://www.tradingview.com/x/kgtFQZt6/
The down wave measures like the 1.618 fifth wave of the diagonal, and there was a bounce from there.
TJ
fyi - just a reminder that the daily bias did flip to positive with a close over the 18-day SMA. We'll see how long it lasts. TJ.
ReplyDeleteThis is diabolical!
ReplyDeleteModern algorithmic trading programs are fully aware of standard textbook chart patterns. At major turning points, they are programmed to exploit technical lines in the sand.
They will intentionally drive the futures tape to a level that breaks a clean diagonal boundary or forces an ugly, disproportionate wave structure just to invalidate the prevailing public bear counts. They design the price action to be as "ugly" as possible to force disciplined traders out of their positions through risk management stops, ensuring maximum confusion before the true, unannounced liquidation phase begins.
Absolutely! Has been that way for years. Thank God for SPREADS!! 😉
DeleteI know someone who is just long nq and es futures from 2009 and keep on rolling over contracts. No trading just keeps small quantity no stoploss no hedge. I asked him better trade spx and NDX but he told me index closes 4:00 pm and then trading gets him indulged which he left in 2009 after a big loss which he has recovere very well. He will retire in 2029.
DeleteA new post is started for the next day.
ReplyDeleteTJ