All But Two

The ES futures have now broken all of the daily up (green) fractals on the daily chart below, save for two - the left-most one, marked with the green triangle, and the all-time-high.

ES Futures - Daily - Still Embedded

Price, too, is nearing the 78.6% retrace level, above which truncation becomes more plausible. Although we proposed a way today that we could count a completed wave up, we said that it is likely a very poor assumption to suggest that down movement is underway without lower lows. The daily swing line is up until it isn't, and the daily bias closed positive.

With today's price movement it is again possible that the upper daily Bollinger Band will move out again, and that seems to be the game being played by the Smart Money until it isn't.

Have an excellent start to the evening.

TraderJoe

Up Wave Still Being Monitored

Here is the SPY 30-minute chart. We are still monitoring the up wave. Cash did not maintain the measurements of a true diagonal, therefore, the best count at this time is that we are still in the impulse (v)th wave, with iii of (v) today, as below.

SPY Cash - 30 min - Impulse

The best alternate labels are also shown on the chart in red. Interestingly, the lack of a diagonal wave may signal that IFF five-clear-waves can be counted upward, then another five-wave-sequence, up, might follow it after a correction. And, yes, there could be a "turn-around-Tuesday ", i.e. lower.

Have an excellent start to the evening.

TraderJoe

Weekend Video - It's Been A While

Here is a short (8 minute) video with an overview of the Historical Dow Jones Industrial Average, and a chart which may be used to make a forecast.

It's been a while since I made one of these but thought it might be worthwhile. You might think the idea is a bit off-kilter, but it is based on EW logic. Perhaps the money printing has merely distorted the "size" of the latest waves since 2009.

Have an excellent rest of the weekend.

TraderJoe

Only Questions Today

Today, after what looked like a high after the triangle, we tried counting downward. It worked for a while, then it didn't work, then it worked again, then - in the last half-hour - it didn't again.  As a result, I have no firm conclusions, but a couple of options. It is possible that non-linear and overlapping action on the ES 2-Hr futures below is either a leading diagonal or we have passed the first wave (i) and are making the red a-b waves, with a downward corrective wave to follow.

Today was reminiscent of the typical "Goldman Sachs" buy-back in the last half-hour, and it was a Friday after-all. So be it. It made the internal wave structure very difficult to count, and therefore, I would be as happy with the b wave as I would be with the diagonal.

This chart & commentary was added on Saturday morning. When one looks at cash rather than futures, with 130 candles on the 30-min chart, it is possible that a v = i move might still occur.

SPX - 30 min - Close Only

Maybe the minor break of the ii - iv trend line is what Elliott would have called a typical 'throw-under' and is a second wave after a "Running Flat" that ended with the diagonal counted out in real time. This pattern would be signaled by a gap-up on Sunday night. The chart is still offered in the spirit of questioning.

Have an excellent start to the weekend.

TraderJoe

Post-Pattern Confirmation (PPC) - Step 2 Did Not Occur

Post-Pattern Confirmation (PPC) - Step 2 Did Not Occur today. That required a retrace that did not go over the prior high. By 4:05 pm ET today the ES futures ticked over the prior high. We did count a potential diagonal downward correctly. Only it was its contracting triple zigzag counterpart that was leg c of the new running triangle shown below on the SPY cash 30-minute chart.

The prior upward count did not have critical alternation for the fourth wave. Now we know why. The new count provides a clear sideways triangle to alternate with the directional sharp wave (ii). The 0 - ((ii) trend line now clearly shows a break for wave (iv). And now, the time taken in wave (iv) clearly exceeds the time taken in wave (iii).

Wave (v) can now run a bit if it wants. Well, try as hard as one can to count properly, there are a lot of things to consider. We were counting upward after the diagonal leg today. That was a real plus! But, we clearly did not count out the new shape of the wave, until we could look at if after the close. That's OK. We have a nice impulse wave shape in formation which might be an excellent example of the things to keep in mind while counting. And, the clear impulse likely means we got the truncation bottom entirely correct.

Have an excellent start to the evening.

TraderJoe

Post-Pattern Confirmation (PPC) - Step 1

Yesterday, in our post entitled 'Five-Up' we showed the likely five waves of an impulse wave upward. If that were the case, then for at least a correction lower, we should have been able to count on a smaller degree chart the 'five waves down'  of the start of a corrective wave as the first step in post-pattern confirmation to help confirm that the upward impulse was done. Today, we did do that, and since yesterday's chart was the SPY 15-minute chart, today's chart is the SPY 5-minute chart to represent the smaller degree. That chart is below.

SPY Cash - 5 Min Close Only - Diagonal

We first tried to count an impulse lower. Notice the 'base channel' in magenta. That did not work - plain and simple. When that channel was broken to the upside, we then switched to trying to count a diagonal wave.  And so far, that was successful. There are five clearly discernible but messy waves downward in a wedge. If you were counting it or trading it, you could feel the market pull back against every down wave trying not to give an inch. Only small sections whooshed like a third wave.

A couple of notes: we counted out the barrier triangle wave iv yesterday, and we said the wave would likely turn below the low of wave ((E)) of the triangle. It did. Second, the first down wave occurred largely in the overnight so - when you look at the futures - wave ((1)) down of the diagonal is also much longer in time than the third wave down.  The diagonal in its current form is good down to 4,433 and the futures near the close are at 4,444. If there is a violation of that level in the overnight, we simply reserve the right to reconfigure based on the futures. Lastly, I upped the degree at the high one level based on the overall length of the wave.

So, with a likely smaller degree 'five-down' at this point we have the first step in Post Pattern Confirmation (PPC) from the impulse upward. The second step in PPC for this count is a retrace that does not go over the high, and the third step in PPC is a lower low than the first five waves down.

Since the market started with a diagonal down odds lean towards a corrective wave lower. They certainly do not guarantee such. The market is whippy - thinking caps are required firmly in place.

Have a good start to the evening.

TraderJoe

Five-Up

Yesterday, we said we could only count a 5-3-5 wave down during the session. Higher highs were possible. Today those higher highs were made making the first time we can count fives-waves-up since the likely truncation lows. This applies to both the ES futures and the SPY cash 15-minute chart shown below with about 162 candles.

Both the second wave and fourth wave locations are clearly seen on the Elliott Wave Oscillator EWO), and the EMA-34 through the waves indicates good form and proportion to them. This is not a diagonal or a triangle. It's just a grinding, non-overlapping impulse upward. The caveat is that the fifth wave, v, may not be completed yet. There is a barrier triangle at the high - which was counted out live and in real time - and the low of the triangle needs to be exceeded lower before a down move can be considered.

This impulse took days to form. Then it is a question of how deep any correction would be, and how long it would take. Interesting stuff.

Have an excellent start to the evening.

TraderJoe