GOLD - Weekly & Daily

In the prior post (LINK here), I said that it was very difficult on the long-term chart to keep degree labels making sense and to get reasonable Fibonacci ratios unless a triangle was considered for the Cycle IVth wave, after the 2012 top. I also said for that reason I was still counting "by parallels" until that was no longer possible. But where are (is) that parallel, and what is the count? The chart below shows the likely parallel at present.

GOLD (GC) Futures - Weekly - Degree Analysis

The parallel is based on the fact that the largest and longest correction should be the larger degree correction by degree labeling. So, it is given the label of Primary ②. And it is much less than a 38% correction, so that means that the prior wave was highly likely an extended first wave, x①. So far, that is holding true as Primary ③ is shorter than Primary ①. Further, the Elliott Wave Oscillator is near a high, so this agrees with a large third wave at this position. As another sign of this count, there are no significant overlaps at this point, and the most likely overlap warning level is shown. So, IF a Primary ④th wave can hold the parallel, then the wave has a good chance of finishing like an impulse. Remember that a ④th wave can be one of several types of triangles if it wishes. This may make trading very tricky & whippy. Keep in mind the ④ and ⑤ shown on the chart are placeholders only - just to keep track of the count, not to indicate the levels price should reach or when it should reach them.

And what about wave Intermediate (5) of Primary ③, how is that finishing? The daily chart shows that wave below.

GOLD (GC) Futures - Daily - Local Count

So far, from the Intermediate (4)th wave on the daily chart, with its EWO signature at or below the zero line, there appears to be an expanded diagonal fifth wave which has already made a new high. So, if there is to be a Primary ④th wave, then it might come back down to the level of the prior fourth wave, which would be the Intermediate (4)th in this case. So far, this wave is on a daily divergence with the EWO, which is often the case for fifth waves. So, the indications are that the technicals are working at this point, and there is still some wiggle room at the high.

Again, while this is not trading or investment advice, be prepared for highly whippy and volatile price movement, or very tough compression or whippy action if a triangle forms.

This is the second post since Thursday. Have an excellent rest of the day and weekend.

TraderJoe

Long-Term GOLD

When Gold is reviewed on a long-term-basis, problems arise with degree labeling, especially in the most recent weekly waves, unless the center section is seen as a long-in-time fourth-wave triangle as seen in the 3-monthly log chart, below.

Notice that after the 2012 peak in Cycle III, the Elliott Wave Oscillator, EWO, did take on fourth wave characteristics by traveling under the zero line again. Also note three items.

• The triangle would be in a 'typical' fourth wave position. It 'may be' a non-limiting triangle, and it would alternate with the sharp Cycle II wave.
• The recent extremely impulsive action looks like the 'thrust from a triangle'.
• The typical technical analysis measurement of the "widest-width-of-the-triangle added to the breakout point" is coming up ahead.

This measurement is one of the few measurements that make sense, whereas other Fibonacci ratios in the recent rise would be extremely out of proportion. For this reason, we are counting the current impulse up in parallels until we can no longer.

Have an excellent rest of the day and start to the weekend,

TraderJoe

Two Options - The Principle of Equivalence

With the ES roll-over futures now at a new all-time high, the Principle of Equivalence tells us to be on the lookout for these possibilities. The first is "Minor A is done" and an Expanding Triangle Minor B is in progress.

ES Futures - Daily - Minor A is Done

What this count has going for it is that it meets the rules, and from a timing standpoint each leg is 'longer in time' than the prior leg in the same direction. For this count to really emerge, then cash should (must) also make a higher high. But, then the minute ⓓ wave should approximate a 150% extension.  Notice there is also a way for the expanding triangle to be in a fourth wave position, minute ((iv)), as shown secondarily, but that is a rarer situation.

The second count is "Minor A is Not Over", and either an impulse for minute ((v)) is underway or a diagonal wave is underway.

ES Futures - Daily - Minor A Still to Complete

In the above chart, the diagonal is sketched out. But then its wave (i) and (iii) would most likely make new highs.

At these lofty heights, the Principle of Equivalence is really saying, "Be absolutely prepared for large down drafts, but look for a pattern than can be counted." Be calm, patient, and flexible and we head towards the end of the year. I'm absolutely ok with either pattern. One implication of the second pattern is that a deeper wave would form for Minor B. One implication of the first pattern is that Neely says that the thrust up out of an expanded triangle sometimes fails.

Have an excellent rest of the day & Holiday upcoming if you are celebrating. I know I am!

TraderJoe

Absurd Futures Rollovers

As a sanity check, I went back through several years of on-line historical data to look at the differences in the futures roll-overs from the lead contract to the next contract using the ES E-mini futures. The sample of data is listed in the table below. To conduct this study, I used the closing prices on the date which was the fifth day prior to the expiration of the lead contract and compared it to the roll-over contract on the same date. The differences are shown in the right-hand column.

Having followed futures trading for most of the 2000's, it was my observation that the futures roll-overs being a premium of -6 points to +6 points just wasn't much of a problem. It was seemingly pretty much at random, and it was a fairly small percentage of the price level. For example, at 6 points of 1,770 points it was about 0.33% of the price level at the time.

But, after the Covid years, the futures premiums have absolutely exploded. Not only are the numerical levels much larger in absolute value, but in terms of the price level the premiums are now 0.85% to 1.20% of the notional price.

This situation is absurd. First, why does it cost one much, much more to roll a contract now than it did before? As shown above, this is not just a function of the price level. Second, one now needs to consider how this extremely absurd amount of roll-over will affect chart structures (triangles or diagonals in progress, for example) when using the roll-over contracts (typically /ES in ThinkorSwim, or ES1! in TradingView).

I have highlighted this matter before. The point is that the roll-over used to be largely a non-event. And now it has become a major event that has to be managed for some reason. And that reason simply is not clear.

This is the second post since Thursday. Have an excellent rest of the weekend. 

TraderJoe

Simplest Is Best - Right Now

On the intraday chart of the ES 30-min (March 2026) futures, simplest is best right now. As the chart shows, two parallels can be drawn around current price action. They should be respected until they should break, if either does.

The overnight pounding action from above on the 6,820 level tends to indicate a triangle, but that is not locked in stone. If it is a triangle, the up wave can be an a / b sequence as shown. But, if the structure is some kind of quasi-structure, or a w-x-y, then the up wave could evolve as an impulse sequence shown as the alternate i / ii. The Principle of Equivalence still tells us to mind our p's and q's until we get some waves with more definitive lengths to the upside or the downside and potential channel breaks.

The daily count options have not changed. To the upside is perhaps the potential daily expanding triangle. And to the downside is still the potential daily expanded flat.

Yes, one could bring in a lot of other considerations: the Santa Rally, the 'holiday effect', ending the year and the quarter on a high for both political gains and capital gains purposes, the typical holiday low volume, etc. But in an Elliott Wave blog, the main consideration is whether the price pattern is an impulse or not. So far, there are three-waves-up. The Smart Money can do a lot of things: gap up, grind up, gap down, etc. Try to use the parallels to check what path best fits and accept the results.

Keep it simple. Have an excellent start to the evening and the weekend.

TraderJoe

Trend Day

Today's lower low and lower close below the 18-day SMA has firmly set a down trending wave in motion as per the March 2026 ES Daily chart, below. This occurred after prices initially rose overnight to the underside of the line-in-the-sand before falling off.

The next target on the chart would be the combination of the lower Bollinger Band and the 100-day SMA. The daily slow stochastic has quickly moved from embedded higher, to over-sold. The hourly count looks like this at present.

It's a bit too early to say whether an impulse is forming or not.

Have an excellent start to the evening,

TraderJoe

Back to the Line-In-The-Sand

US equity prices, as measured by ES futures had an inside day today. This temporarily (at least) turns the swingline indicator up. With prices not making a new daily low today, the 18-day SMA rose up enough to cause prices to contact it as shown in the chart, below.

Meanwhile, a new up (green) fractal formed at the prior high, and the regular calculation of the daily slow stochastic lost its embedded status. The only day it can get it back is the next day (tomorrow) without going through the whole rebuilding process again. Because of the prior day's lower low and potential lower high, IF a follow-through down bar occurs tomorrow and there is a close below the 18-day SMA, it could start a trend lower. It hasn't happened yet, but we'll be on the lookout for it. 

For the moment things are dead-neutral. From a wave count perspective, the downward count remains the expanded flat, while the upward count remains a potential expanded triangle.  Again, keep an eye on the local technicals until the situation clears. 

Have an excellent rest of the evening,

TraderJoe