Sunday, October 18, 2026

Break-ie, Break-ee

Attached is the daily chart of the ES futures (rollover contract) with the steps for potential diagonal confirmation clearly shown. The chart uses the Zigzag indicator, so the wave terminals are accurate.


The first confirmation step may be checked (or tic'd, as they say in the UK) as complete. The remaining are yet to be seen.

What happens if confirmation is not obtained? Then, one must look for a different structure, such as a large Flat at the high, or possibly a triangle, or something similar - even a larger diagonal.

Let's see how it goes. Have an excellent rest of the weekend,

TraderJoe

20 comments:

  1. Thanks Tj. Your tick list is big? Isn't triangle invalidating?

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  2. ES 4-hr: here are the best local count options as of this evening. It's a bit of a mess, but there is a greater-than 1.618 wave. It 'could be' a real top but we must still be patient and flexible.

    https://www.tradingview.com/x/tAgk0eok/

    TJ

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    Replies
    1. Thanks tj. Now I get it, a very big and large🔺️

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  3. Interesting not overlapping yet. Bear cross also not visible.

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  4. Just fyi - NFLX earnings after the close with some airlines & finance too, among others. TJ.

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  5. SPX500 (CFD) 5-min: there are five non-overlapping waves down off of the earning's high. This suggests that after a retrace there should be 'at least' another five-waves down.

    https://www.tradingview.com/x/BDNaw2V5/

    TJ

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    Replies
    1. ...there was indeed a lower low wave after a quick 62% retrace. Let's see what happens overnight. So far, that just makes three larger waves down.

      https://www.tradingview.com/x/bunVp5RU/

      TJ.

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  6. SPX500 (CFD) 30-min: from the IWCS - the market spent the night on both sides of the 'equivalent' of the 18-day SMA on this chart. It has also been on both sides of the intraday 18-per.

    https://www.tradingview.com/x/X273XapZ/

    Pretty sideways movement overnight with the exception of the earnings pop. Time for a directional move.

    TJ

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    Replies
    1. hiding the BB bands for a minute, this is wild, whippy overlapping action which 'could be' a triangle that points up.

      https://www.tradingview.com/x/f4VijaZM/

      Or, if lower lows are made it can be reversed into an expanding diagonal within certain limits.

      TJ

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    2. ...there are now lower overnight lows; so, while not confirmed, this 'expanding' diagonal becomes potentially possible.

      https://www.tradingview.com/x/fAO3SZfK/

      TJ

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    3. ...diagonal is now a validated possibility with the longer wave down.

      https://www.tradingview.com/x/1IGOZxDY/

      A 'reason' for the diagonal would be 'resistance at the 18-day SMA'.
      TJ

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  7. Confused markets. Break above es 7802 will clear the counts more.

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  8. SPX500 (CFD) 30-min: the 'validated possibility' of a diagonal became an ending wave, likely as a 'b' wave (triple zigzag structure can account for both). There is now a marginal higher high. And the ES 4-hr chart now has a wedge-shaped pattern looking like this.

    https://www.tradingview.com/x/vx9jTLu7/

    TJ

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    Replies
    1. It does look wedgey, but there is a bigger wedge in play, plus (I think) an island/diamond-shaped top possibly. https://www.tradingview.com/x/OqlQZA2M/

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  9. SPX500 (CFD) 5-min: downward overlap after non-overlapping five-up.

    https://www.tradingview.com/x/twwSwIm3/

    Watch out as things could get messy with earnings tonight (Meta, Tsla, IBM, TXN, etc.)

    TJ

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  10. SPX500 (CFD) 2-hr: current up count is a near-equality set, as below.

    https://www.tradingview.com/x/19Sn2nXN/

    Wave can not form a contracting diagonal that follows the rules because the second set is slightly longer. That said, there is not much, lower, until today's low is undercut. Also, keep an eye on that 18-day SMA.

    TJ

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    Replies
    1. P.S. If the upward correction wants to extend in time according to the rules, a triple zigzag might work; or an expanding diagonal might work. These become somewhat lower in probability though. TJ.

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