Current Count and Alt

Here's the current situation on the SPX500 (CFD) 4-hr chart. The black diagonal count reflects the fact that there is no good divergence yet with the NYSE A/D line.

The wave up from blue (b) to blue (c) or red 4 to red 5 is an impulse in either count. This is another good illustration of how The Principle of Equivalence plays out in practice: some impulse segments can be parts of two counts.

Three key factors in either count are: 1) the current down wave has traded below the Ⓐ wave of the prior triangle, at micro degree, 2) the current down wave is longer in price than wave ii of the prior impulse, as shown, 3) while a Flat for blue wave iv is still technically possible, it looks to be much lower odds at this point because it's up wave would be longer-in-time than the prior wave iii, the previous higher degree wave in the same direction, and this would seem to be a violation of degree definitions. So watch the high of this down wave.

Have an excellent rest of the day.

TraderJoe

Werds

Some people can take up so much of your time with their shameless self-promotion, subscription fees, videos that contain advertising, or channels that provide them with clicks or likes. We decided long ago this was unacceptable. So, we'll provide the effort-saving chart, below.

It would be nice to see a few more of the items to be in evidence. That's all. Simple.

Have an excellent rest of the weekend.

TraderJoe 

Wedgie

The currently wedging and overlapping SPY (5-min) has filled its opening gap up, and filled its prior gap in the down direction, as in the chart below.

SPY (Cash) - 5 min - Wedging

The pattern needs to be watched to see if it breaks upward or downward with conviction.

Have an excellent start to the day.

TraderJoe

Threatening - But Not Yet Imminent

When looking over the Dow daily chart, there are several examples seen in the prior high on Jul 6th where one can potentially count a diagonal. However, none of those diagonals came to pass - they were not fully retraced in less 'time' than the diagonal took to form - and, in fact, there has been a higher high since. This usually happens when the potential diagonal is part of a sickening "b" wave upward. Regardless, we now know they were not diagonals. So what does this mean? Well, I think it helps to back off and look at the Dow futures daily chart, as below.

Dow Futures (YM) - Daily Close - Parallel

As the chart shows, the wave up from the April 2025 low parallels extremely well. This is supposed to mean the move is corrective, unless the price gets substantially over the upper parallel. As of this time price has not even reached the parallel. And, as the saying goes from the Elliott Wave Principle by Frost & Prechter, "A line drawn from the start of A to the end of B, with a parallel copy placed on the end of the A wave often shows the end of the C wave."

Now clearly that does not work every time. That is, in part, what the Kennedy Channeling Technique (KCT) is about: when a wave bursts through that upper parallel, that is when a third wave can often be identified.

But, here again, this is only a tendency of the KCT, too, because sometimes a C wave is 1.27 x A, or even 1.618 x A, depending on the circumstances, and then prices peek up out of the channel and then revert.

Nothing works all the time, and again, this is almost always a situation with odds. Last night I was playing tile rummy, and the first thing you do is draw tiles numbered with integers from a pool of 100 tiles. You draw twelve tiles. So, that means roughly from the pool of integers, one should expect six even and six odd tiles from a well-mixed set of tiles - which they were. What did I draw? Fully 11 odd tiles and only 1 even tile! Can you imagine the odds of that? Yet, the low odds event did occur - sure as I'm writing this.

So, even though the Dow looks like it might want to lead down first after some further potential upside - just like it did in 2000 - that does not mean it's a 'lock'. As of yet, the only alternation in the chart above can be stated as "long A, short C". One might have hoped for "Impulse A, and Diagonal C", but that is not on the board yet. It could be. So, I retain that option if things drag on & on.

In the meanwhile, just like a view of the weather radar, one has to say the potential severe storm that is several states away is "threatening, but not yet imminent". It could get rough, soon. So far, it hasn't.

Have an excellent rest of the weekend.

TraderJoe

CoD

This is a Friday morning Chart-of-the-Day (CoD), the SPX500 (CFD) 30-min intraday wave counting screen (IWCS). After a pop up on the dismal Payroll Report, with traders hoping for a rate cut, the up wave could not sustain the fourth wave of an impulse and instead lost the embedded reading of the intraday slow stochastic (black circle).

SPX500 (CFD) - 30 min - IWCS

When that occurred, price returned to the intraday 18-SMA and also overlapped the prior wave downward, with a longer wave in price than the prior down wave. Since then, price has popped again in whippy volatile trade. This seems to suggest that price will either make a triangle or a fifth wave expanding diagonal upward.

Comments for this blog remain on moderation. Have an excellent rest of the day.

TraderJoe

Based on the Wave Sizes Alone (i.e. Degree Labeling)

I wasn't a big fan of the triangle sketched out earlier in the comments for the prior posts. So, after the heat of the battle, I took a step back to weekly chart, and the following count occurs to me that it can not be ruled out.

SPX500 (CFD) - Weekly Close - Looking for Minor C

Based only on the sizes of the A and B waves, that is, based on degree labeling alone - it can not be ruled out that Minor wave C will be a contracting ending diagonal. We all know the (b) wave went essentially nowhere and had different forms in different markets. This might be a reason why.

Price is making higher highs which is also a potential sign of a diagonal or something larger upward. If this is what should wind up occurring, it would also be one of the trickiest waves of a lifetime. I will also offer the caution that this is still hypothetical and very risky.

Have an excellent start to the evening,

TraderJoe

The Ups & Downs = Be Flexible

Here are two scenarios for the current wave movement. The upward chart is first. Triangles are a pretty 'typical' pattern and often happen before the ending sequence of a wave. As such, it has slightly better odds than the downward pattern.

The purpose of the above the triangle is to still better equalize the wave travel downward between wave (e) of the potential triangle and the second wave circle-ii, minute-ii. The Elliott Wave Oscillator (EWO) is still in range for a fourth wave.

The second scenario is high risk & lower odds. It is that a downward diagonal has started without a really large downward reversal candle. With the three-waves down that we analyzed in the prior post, the down movement would likely have to be a diagonal, and it has a pretty strict invalidation limit.

It merely assumes that the triangle has already occurred as there IS a potential wave four and weak wave five signature on the EWO. The triangle is also a bit skewed and that increases the low odds of the pattern. But, it is what it is. Lower odds, but possible. One thing to like about the second pattern is that the equalization between minute-ii, circle-ii & minute-iv, circle-iv is that the equalization has already occurred.

So, just be careful, flexible & patient until something begins to take over the count. 

Have an excellent start to the day.

TraderJoe