Because Waves Tend to Travel in Channels

This chart is because waves tend to travel in channels. The overall count has not changed. The (X) wave can be almost any corrective structure, including a zigzag, a multiple zigzag, a flat or expanded flat or a triangle.

S&P 500 Cash Index - Daily - Still on Track

In this count I do not see any degree violations because Minute c of Minor B is still smaller than all of Minor C of Intermediate (W), both in time and in price. This count could have as it's intention to fill some gaps at C of (W).

Notice the MACD has a peak at A, and a peak at C, but not a typical 'third-of-a-third' with a divergence.

Have a good start to the weekend,

TraderJoe

NQ Soars Like an Eagle while others Turkey Trot

The NASDAQ 100 futures (NQ) made a subsequent higher high today, providing five waves up in one segment, or nearly so. Meanwhile, the ES futures made marginal lower lows and a lower high. Here is the current count on the NQ 100.

NQ Futures - Daily - Still in Minor C

Wave minute ((iii)) is just at the location where a fourth wave down can overlap wave ((i)) and remain just shorter than minute ((ii)) as needed if this is a contracting diagonal. 

Meanwhile, the ES futures have an intraday chart that looks like this one, so far.

ES Futures - 30 Minutes - Lower Low & Lower High

We have a wave counting stop above resistance at 3,175, but, so far, the down move was one of the more impulsive waves we've seen in a while. So, downward movement should continue.

The next best count instead of (i), (ii), i, ii lower is just an (a)-(b)-(c), down and a new wave up. The downward count needs a new low in the after hours or sometime tomorrow. Right now i is shorter than (i), and ii is shorter than (ii) in price and time.

Have a very good start to the evening.

TraderJoe

Count from the Minor B Wave High

This is the current count from the Minor B wave high. It is a pretty clean diagonal downward and subsequent complex upward wave.

ES Futures - 30 Minutes - Diagonal and Flat

The diagonal shown down to (i) is a 3-3-3-3-3 diagonal, and as with all diagonals of this type, it can be 'leading or ending'. If it is leading, it would be minuet wave (i) of a larger minute wave ((i)), downward of the Minor C wave.

The diagonal must be respected. What might tilt the odds a bit (55:45?) in favor of the leading diagonal is the fact that there is a clear FLAT wave = 100% following it. Flats are corrections, so why would a corrective wave be following a diagonal, unless the upward wave is to correct downward one? The clear purpose of a complex flat wave is to give the correction more time, and a bit more price.

Still, there is a clear invalidation point, and we often hear of the supposed "deep retrace" following a diagonal wave, particularly if it is the first wave in a sequence.

What should be starting to be apparent is that if the Minor C wave downward is starting out this slowly, then the angle of the trajectory of the C wave will like be more shallow than the downward A wave, assuming the B wave holds its own.

In any case, today is yet another relatively clear of how we are not crashing yet - with as many people on their internet blogs and videos trying to tell you we are crashing. Not yet, but maybe soon. Let's see what direction the overnight gap is, and if there is any downside after the cash market open.

As an alternate, if the downward wave invalidates, then the presence of a diagonal would tend to indicate that it would be the (c) wave of wave ((iv)) of Minor B wave still in progress upward. But again, the presence of the flat tends to argue against that.

Have a good start to the evening.

TraderJoe

Near ((c)) = ((a)) for Minor B - Part 2

Today's marginal higher high in the S&P500 Cash Index got the Minute ((c)) wave ever closer in length to equality with the Minute ((a)) wave. At the end of the day, it ended with a slight deficit. But, the marginal new high is enough to provide a likely ending diagonal for the Minute ((c)) wave, as per the updated hourly chart below.

SP500 Cash Index - 1 Hr - Minor B

Although the cash market made a higher high during the regular cash session, the ES futures did not make a higher high at that location. That now adds to the number of potential inter-market discrepancies being seen.

1. The NQ futures made a new all-time high, the ES futures have not (yet)
2. Cash S&P made a new higher high in the cash session, ES futures did not.
3. S&P Cash exceeded the minute ((a)) wave, Dow cash did not.

The list is getting very hard to ignore at this point.

Have a very good start to the evening.
TraderJoe

Near ((c)) = ((a)) for Minor B

The cash S&P500 has not yet made a minute ((c)) wave = minute ((b)) wave for the Minor B wave, as per the hourly chart, below.

SP500 Cash Index - 1 Hr - Near ((c)) = ((a))

This has been a difficult wave series to count because of the sideways triangle within minute ((a)), the nearly equal b wave for a 'flat', and the c wave diagonal downward to end the minute ((b)) wave. We have shown portions correctly. We didn't get it all correct. But, because the Minor B wave exceeds the 78.6% retrace level, we think it counts best as the B wave, and not the second wave that starts the long awaited crash. Note that the angle of the minute ((c)) wave is less steep than that of the minute ((a)) wave. You can see this by the number of bars being larger on the ruler shown. This might indicate that the downward pull of the market is the stronger one.

If the NQ futures exceed the 10,658 level, then that will only be wave ((iii))) of their potential ending diagonal. If not, then the diagonal can end or truncate in this area.

Stay flexible patient and calm, and have a good start to the week.

TraderJoe
P.S. Please refresh your browser if you did not get the completed post the first time. Thx!

Diagonal After "Too Far too Fast" Wave ?

Here's a look at the high-flying NASDAQ 100 Futures. Is it possible the chart is reflecting a diagonal wave, after a "too-far-too-fast" wave upward?

NQ 100 Futures - 4 Hr Close - A,B,C

It is very likely that the Minor A wave, up, is a regular five-wave impulse wave. Therefore, in a zigzag, the C wave may be a diagonal wave. Why would there be a diagonal here? The diagonal would reflect "too-far-too-fast" conditions evidenced by the "Running B wave". The B wave is satisfactory in that it crosses back down over the Minor A wave to correct it. But it is the most meager of corrections, and represents the strength that the index is about to express as the result of the majority of business being shifted to on-line retailers, high tech electronics & biotech during the pandemic.

A count of Minor A,B,C up would result in an Intermediate (W) wave, up, and would be similar to the (W) wave up in the S&P500 cash index, and ES futures.

With the advance-decline line having recently made new all-time highs, there are still ways this wave can progress upwards.

Please note this is the second post this weekend, if you have not read the first one yet.

Have a good weekend,

TraderJoe

Five-Up with Exhaustion Gap?

In the S&P500 cash market it is possible to count "five-waves-up" including the possibility of an exhaustion gap. See the cash 15-minute chart below. The gap is still shown as a red circle as it is not closed yet.

SP500 Cash Index - 15 Minutes - "Five Up"?

Notice the current perfection to which wave v would equal wave i. After the jobs report and the spike higher, we counted a downward wave, followed by a double-zigzag corrective wave higher to the 62% retrace level - in near real-time. (See the comments in the prior post for further details). This was followed by another downward wave that broke the prior local low.

As we know the cash markets will be closed tomorrow, and a lot of things can happen in the overnight futures. For a continued downward count, then the trend line from the high (shown as the dashed blue line) needs to be observed otherwise the only wave downward would have to begin as a diagonal, and not an impulse.

Is it possible this upward wave is not over? Yes, it is possible. In that case, perhaps wave iv would extend to a triangle. But, it is not required to, and there isn't even downward overlap in cash yet.

So, with five-waves up, this could be the minute ((c)) wave up, of the larger Minor B wave in the S&P500 and ES futures. The DOW has not crossed it's prior wave upward, and as we said yesterday, can still be in a triangle.

Have a great start to the long weekend if you are in the U.S.A., and a good start to your evening if elsewhere.

TraderJoe