Count So Far - 2

Phasers on Stun! The whippy after-hours trading caused by galactically stellar earnings beats & misses appears to have created a sub-wave as follows on the 4 Hr chart of the ES/SPY (CFD) below.

On the prior post I didn't draw the parallel in for nothing. This count was possible by reducing the degree of the diagonal by one degree and suggesting that it might be a leading diagonal. Notice that ii is smaller than (iv) in price and time, so the degree labeling still works.

We don't 'know' that this parallel is the case yet but a clear invalidation level for the count exists. Remember, tomorrow is the last day of the month which often, not always, sees end-of-the-month window dressing before the potential first-of-the-month passive inflows from the usual sources.

Have an excellent rest of the evening. Be cautious, patient, calm and flexible this evening as traders around the world - in all time zones - give Chairman Powell his Intermezzo Curtain Call.

TraderJoe

Count So Far

The ES/SPY (CFD) futures have declined in the overnight sufficiently to overlap the first wave, i, in a diagonal sequence. Therefore, the appearance is that the diagonal five waves in the futures resulted in five waves in the cash market. The diagonal is shown below in the ES/SPY (CFD) 2-hr chart below.

In the diagonal wave v < iii < i, and wave iv is shorter than ii, with wave iv overlapping wave i. Cash can be counted without overlap.

Now the only questions are 1) the degree of the waves, and 2) is the diagonal leading or ending? With regard to the second question first, it seems atrocious to suggest a leading diagonal this high in the wave count, but the simple fact is that major earnings are still due this week, along with a FOMC meeting. So, I am just keeping an open - but skeptical - mind. Further, there is no announced complete resolution to what is occurring in the middle east.

With regard to the degree of the waves, the question is whether this is a minute degree wave, minute ⓘ, or whether the whole wave constitutes the alternate Minor C which is shown in red. The only way to tell would be if certain levels were exceeded, including the start of the entire wave on 31 March 2026.

Have an excellent start of the day,

TraderJoe

fire danger? !

When you see this sign in the woods, it's not a good idea to light new campfires. A similar situation exists now on the ES 4-hr futures. Yesterday we suggested counting upwards, and we did that today. The market went a bit higher and hit ES 7,200. But our equivalent count on this contract indicates that with 110 candles on the chart, The Eight-Fold-Path Method suggests a five-count is best on this wave largely in a channel.

The wave includes a completely acceptable fourth wave retrace in this timeframe that we called the end of.

Yes, there can be more upside. The (v)th up wave could become as long as wave (iii) since the first wave is the extended wave in the sequence. Maybe the wave goes on into Monday or Tuesday, pending news. But when the wave turns down, there could be a steep correction, and possibly, but not certainly, a complete retrace depending on whether the degree labels are the correct size. In other words, this wave could be all of Minor C, or it could just be minute ⓘ of Minor C. It's a very difficult call, but I've gone with the most conservative view until we know more. Either way the risks are pretty high.

Just thought I'd share the count. Have an excellent start to the evening and the weekend.

TraderJoe

Possible Set Up for v of (c).

Today's wave structure was difficult unless you were possibly expecting a crazy (meaning multiple segment) fourth wave. These can sometimes happen in the market. Those of you that followed the market intraday know that a bout of selling hit that drove the market to a small outside reversal day down. Readers of this blog should confirm that on the ES daily chart. The SPY cash market got to within -0.03 of a new high, shown below, but couldn't do it today. At 712.35 the SPY could not get over the prior high of 712.38 and then headed lower in five waves. So, the ivth wave looks to be a compound flat. That's fine, nothing wrong with it at these length dimensions. The reason we think it's a Flat is that the highs are well within the 90% level of the prior highs required by the 'rule' for a flat wave.

Then, after the decline on the SPY 10-min chart, there was a quick retrace followed by sideways action as shown above. So, until we know more, this can be a setup for a vth wave higher in the minuet (c) wave of Minute ⓘ. I would watch something like the parallel shown - which should be adjusted when the second wave, ②, is known. Then a third wave of v might take us over the prior high.

As far as I can tell, today's low should hold or the downward wave would likely overlap and cause complications to have to deal with. So far, it hasn't but it is marked as invalidation for that reason.

If the vth wave can hold its length dimensions, then it might be possible to call minuet (c) and minute ⓘ done and over. If not, we'll look to the alternate impulse count of Minor C, not the diagonal count.

The trading is whippy and choppy and still calling for much patience and flexibility. For example, anyone that thought we were going directly over the high today had a big surprise handed to them until about 14:00 hrs. That shouldn't be us. We know the character of fourth waves to be 1) complicated, 2) mis-leading, and 3) do everything but overlap their prior first waves. It certainly feels like that is the wave personality we are dealing with. So, take it slow & comfortable. The market will let you know.

Have an excellent rest of the evening.

TraderJoe

Bias Still Up

Today in the ES futures was another inside day, still with the price bias up and the close over the 18-day SMA. The day opened on a gap up, chopped around for much of the day, tried to head higher towards the futures close but could not yet break out of the prior range. The daily chart is below.

ES Futures - Daily - Bias Up

The daily slow stochastic is still embedded over the 80 level, and until its red line closes back under 79 it remains embedded.

The wave count remains intact, so far - as per the prior post. One can see that the nearby up (green) fractal might be the first to break higher. One can also see just how far back the market has placed the prior down (red) fractal - all the way back at the 200-day SMA.

The market feels somewhat shredded by or similarly ruled by the news cycle but so be it. Those are the market conditions at the moment, and they are what they are.

Have a good start to the evening,

TraderJoe

Still No Overlaps

Here is the ES futures 4-hr channel count & the alternate count (in red) to follow The Principle of Equivalence. There are still no good overlaps to play off of. There are, as yet, no sizeable downward waves, and there are not really very good signal bars at the high, yet. The count does its best to follow degree labeling definitions. It may be there was extreme alternation in ii vs iv, with iv being a triangle in wave (a)/(i) instead of a diagonal.

ES Futures - 4 Hr - Price in a Channel

I lean towards the blue count as equality has not necessarily yet been reached in the up wave. Further, the $NYAD (NYSE Advance/Decline Line) made another new high today. That needs to be different if any bear market is to begin. I did not fight that signal in the last wave, and I'm not fighting it now. Price is still in a channel, so the up wave looks corrective at this time. That could change, but it hasn't yet.

While the bull/bear survey sentiment data has not gone wildly higher, the Equity Put-Call Options ($CPCE) indicator dropped to 0.41, the lowest for the year and tying the lowest for several years. The five-day moving average is also at a new low for the year. So, this indicator is definitely in the Speculative Zone as a contrary indicator.

Weekly and daily, the ES has hit the upper Bollinger Bands. This is a place where Ira's trading guidance suggests the Smart Money may take at least some profits off the table. So, some stiff pull-backs might be expected soon. Further, the news background remains volatile until more information is obtained. The presence of an inordinate number of gaps in this wave up on the cash charts also give rise to caution and the need for patience and flexibility.

Have an excellent rest of the weekend,

TraderJoe

Reminder: The Principle of Equivalence

This is just a reminder that The Principle of Equivalence suggests that there are two common forms of wave shape that a Minor C wave could take, as diagrammed below. First, Minor C could be a contracting diagonal unto itself as shown on the left.

Minor C Wave - Two Forms

Second, is an impulse C wave with a fifth wave diagonal - as shown on the right. Either of these would work, although the first one might have better alternation with the Minor A wave overall which appeared to be a non-overlapping impulse.

There is, of course, a third much more rare form of an overall expanding diagonal for this wave. But, as of this time there just isn't much evidence for that count. And - because it is more rare - it will be dealt with later, if needed.

With that in mind, The Principle of Equivalence also says that - without any current overlaps to work with - we must also consider these two counts on the four-hour chart on the way up.

Again, we have no overlaps to work off of, yet, and I am following degree labeling here as best as possible.

Have an excellent rest of the day.

TraderJoe