Tonight's the Night (Or Not...)

With apologies to Sir Rod for the title, there is a decent chance the ES futures may form an expanding diagonal in the downward direction. The 2-hr closing-only version of the chart is below just to show the form of the wave, but most of the components are in place in about 130 candles.

To complete such a pattern, there would need to be a new daily lower low and a fifth wave that is lower than and longer than the third - tentatively shown above.

IFF the pattern can not complete downward, and moves to the upside, that would leave only a clear three-waves-down and we would have to consider as alternates some extended fourth wave patterns (like a double-flat, triangle, or even diagonal upward) in a larger daily upward move. But, right now, it is what it is. It counts like it does. So, I'd rate the odds at about 55-45% lower because one could ask the question, "why did the structure form at this time exactly the way it has?"

There is further a recognizable pattern on the Elliott Wave Oscillator (EWO) with the expanding trend lines, so let's see how it goes.

Have an excellent start to the night (day).

TraderJoe

Fighting

Like different groups preparing for a revolutionary war battle, the daily ES timeframe and the intraday are currently practicing their maneuvers - and probably in lighter volume as we head into a holiday-shortened week and one in which many, many people take the whole week off for their vacations. While, today, price is just barely below the 18-day SMA on the daily chart the intraday situation is at odds.

Overnight the market has ground up and is still currently over the intraday 18-per SMA. The intraday slow stochastic is waffling around and is not yet embedded. The uptrend pattern is very overlapping at this point, but I could see a way where it is not a war injury that won't heal. But this does remain a warning sign. It remains to be seen if the two timeframes can get in synch.

Have an excellent start to the day.

TraaderJoe

Micron: Nay-I

Today after the close were the earnings for Micron Technologies (MU). These followed a day when the ES futures first made a lower daily low then, primarily in the after-hours, reversed to close higher as in the daily chart below.

The lower daily low kept the swing-line lower, and the close under the 18-day SMA keeps the daily bias down for now.

I'm glad Micron is working on A-I. But the current state of information flow is just awful, artificial or not. I waited on several sites for the MU earnings release. I almost never do this. One of the sites specializes in earnings, and another is connected with a well-known financial news TV network. The site that claims to specialize in earnings said they would be released at 4:00 pm (ET). Simple enough - by about 4:01 pm the earnings came out but not the revenues. 

A couple of minutes later still nothing from the TV site. Not even the earnings. I kept refreshing each of the pages for several minutes, still no revenues at the earnings specialization site, and still nothing over at the TV website.

I waited 'till about 4:10 pm and then had to leave for an appointment. Nothing changed. I kept refreshing and refreshing. Nothing different.

I came home to write this about 2 hrs later and both of the sites were updated with earnings and revenues. Yippee! (Not).

You see, everything a trader or investor needs to have in an earnings release can be summarized in about five lines.

1. Earnings per share
2. Revenue
3. Guidance
4. New Products
5. Special Situations/Challenges

Why in the world such a simple statement can not be released at the agreed upon time is absolutely beyond me. It should be available "on the minute", not on repeated refreshing nor having to check several sites.

What good is A-I, if information release itself is going to be so scatter-shot? Artificial Intelligence can analyze a lot - but not if it isn't given the information in the first place. The more I interact with the trading/business world, the more ridiculous some of these lax practices seem.

So mighty Micron will make more money making more chips. For what? You want more data centers? For what? As I was watching for the after-hours earnings, one could see the ES futures move steadily higher at least in unison with the initial earnings per share (actually starting about 15:30 ET somewhat in anticipation). Is a new data center going to change that situation?

Yes, a new data center might better help you plot your personal voyage to Betelgeuse, so you can study the supernova - if and when it happens - in person. (The computers used to guide Apollo to the moon are probably not good enough.) Oh. But guess what? Even though you plot your course, get it laid-in the Nav system, and get launched in the right trajectory using your new super A-I data, your lifespan isn't long enough to survive the 672-light-year journey even IF you could travel at the speed of light; which you can't yet.

Go ahead. Make more chips. Make a LOT more chips. Pollute the air and the water doing it, only to have them become as obsolete as my old Pentium-3. At some point, data processing is at least sufficient for most tasks. I'm not sure what benefits the 14th generation I-7 is even delivering compared to its first couple of iterations. It certainly didn't make the earnings release happen any earlier.

Get my drift? Have an excellent start to the evening,

TraderJoe

Yawn?!

Today provided a lower high and a lower low on the swing-line indicator for the ES futures with a daily close under the 18-day SMA. This sets the daily bias as lower - at least for the time being.

ES Futures - Daily - Swing Line Lower

Some of the internal movements were a bit whippy, so it wasn't a total yawner - one had to stay on their toes a bit. But it is summer, and a lot of people have other things on their minds like vacations, World Cups, staying cool in hot weather, etc. So, less interest might be expected.

Still, from an Elliott Wave perspective, the current wave structure counts like it is unfinished, so it might be possible for price to target the lower daily Bollinger Band. Note that the daily slow stochastic is nowhere near over-sold yet. And price is still in a downward sloping parallel so lower lows might still be expected.

Have an excellent start to the evening,

TraderJoe

Weaks Away?

(Pun intended). Is the Dow Jones Industrial Average, and its futures contract, shown below, days or weeks away from a major top? With 109 candles on the 8-hr chart, the pattern we posted in the comments of a prior post can still be playing out. It would be that of that overlapping expanding diagonal pattern with the 3-3-3-3-3 internal sequence, which is classified as a terminal pattern.

DJIA (YM) Futures - 8 hr - Expanding Diagonal

The three-wave sequences of a-b-c's are clearly shown. There is good form & balance with every numbered wave on an opposite side of the EMA-34. Nothing looks rushed, and we are trying to give the last wave as much time as it likes to play out because typically the waves expand "in time", too.

Sometimes, the last 'b' wave in this pattern will be a triangle. That can stretch the timing out some if the market wants. But the overlap seems like a key clue to this pattern. And there is a lot of room for algorithmic back-and-forth within its daily Bollinger Bands.

Unfortunately, I'd have to say that while a higher high often, and most usually results in this pattern, it simply does not have to if it is the true end of a larger pattern. The last wave can fail - which will also make it a bit of a cat & mouse game. But the (v)th wave has already exceeded the length of the (iii)rd and so the pattern is 'qualified' by the rules.

Further, also as previously noted, the expanding pattern shows up clearly in the waves of the Elliott Wave Oscillator (EWO or AO).

The b wave can be quite intractable, as usual, and it can be 'any three' including zigzags, multiple zigzags, flats, expanded flat or a triangle as noted.

But the last c wave, up, should be countable as a 'five' even if it truncates.

I'm really happy to see that the once mighty Dow, the once king of the indexes, has lost its following at this time, and everyone is all "NASDAQ & Mag10, and don't bother me with anything else." Maybe this once great index will still have a story to tell.

Have an excellent rest of the weekend,

TraderJoe

The Battle of Juneteenth

This famous historical battle is being fought at the 18-day SMA on the ES daily chart below. The snapshot was clicked about 9:30 am - just a few moments ago. It's hard to get closer than that.

So far, the correct answer to the question of, "will the up (green) fractal or down (red) fractal be broken first?" is, well, neither. Reminder: Globex only has a partial day today.

Have an excellent start to the day,

TraderJoe

Warsh-It (2)

Gesundheit.  Whatever you thought of the new FOMC Chair's performance today, the market sneezed enough to flip the daily bias to lower with a close on the daily ES futures below the 18-day SMA, filling a daily gap in the ES futures in the process. This condition needs to be monitored as to whether the new up (green) fractal is taken out before the down (red) fractal or vice-versa.

ES Futures - Daily - Bias Down

I've seen a lot of corporate CEO types come & go. I've worked for some. Yea. They always start with "what a great team we have here", and "things are gonna change beginning now". And, when they don't know what to do so immediately, they typically create lots of committees to 'study things'. 

As the reporter said at the press conference, "if you were serious about cutting inflation, you would have raised rates today." He didn't. He listened to his other peers who likely told him, "You're gonna have a bad enough market reaction just saying you're serious about inflation without the rate hike. Raise rates too and you're going to see real problems".

Instead, he let his jawboning both take the edge off some assets and raise rates over in the bond market too.

And, ironically, he said he needed a task force to "study" the reason for inflation. Meanwhile, everyone on the committee and in the room is snortle-chuckling thinking, "uh, don't we create inflation by printing money and destroying the value of the dollar? We need a task force for this, huh?"

And, when asked whether financial conditions were easy or tight, he rightly answered, "well, they are certainly different in the housing market than elsewhere." Boom, chacka boom. And what organization was it that raised interest rates from 0.25 to 5.25% in a couple of years? Oh. Meanwhile, his speech today raised interest rates marginally on the longer ends of the curve: the end of the curve housing depends on.

So, all-in-all, it's a "kick-the-can-down-the-road" performance, just as many of Jerry's later ones were. Of course, the three blind mice (Bernanke, Yellen & Powell) weren't really blind, except to inflation. They just knew if they stopped printing money, then asset prices might fall. Meanwhile, prices at the imaginary Grocery have just about doubled (i.e. 100% inflation). And, the Grocery is only imaginary because it's not counted in "Core PCE". I don't know about you, I think they just about have the "core" backwards. I need to count on food & energy the most, right after shelter, so it shouldn't be excluded from anything.

But, when you make decision by committee, this is what you get. Committees are fine except you have to watch out for a committee's natural tendencies to 1) be too polite, 2) water things down too much, 3) stall and ask for more time, 4) ignore the more vocal - and usually the more correct members - because for some reason, they seem to have a temper. When, really, the answers are simple - just painful to implement. And no one wants the pain.

Have an excellent start to the evening,

TraderJoe