Monday, July 10, 2017

Update on Potential Triangle / Diagonal

Below is an update of the ES E-Mini S&P500 Futures 4-hr chart as of the settle today. The good news is we were able to count a very clean five wave impulse up in both cash and futures today, and we got the upward overlap on the a wave we were expecting in last night's post.

ES E-Mini S&P500 Index Futures

The complexity is that we need a clean zigzag upward for either the triangle (as shown here) or a further extension of a downward diagonal. We don't have that yet. If wave .ii, .iii, .iv, and .v on this chart can form to complete the (c) wave upward, that will help clarify either of those two counts. So, that is what we expect. Perhaps wave .ii resolves tomorrow morning without making a new low below the lower blue b.

If - on the other hand - prices "just let loose" tomorrow morning, for some unexpected reason, then since the downward a wave has been overlapped upward, with five waves up completed today, then we would be forced to conclude we today had the (c) wave upward of a "failure flat". Those are quite rare structures so the odds are against this option. We just point it out because running structures have happened in the upward waves of this overall Primary 5th wave. We wouldn't want it to catch you off guard.

The other thing we wanted to mention was that downward a wave can be counted as a :5 in the futures, and/or a :3 in the cash market. It's just one of those ambiguous waves (not like the :5 we counted today). That's why there is still an option of a large expanding diagonal downward, if it's the :3, or a five wave a wave that comes before a triangle. So, the market kept it's options open today (no pun intended), and we did too!

Have a good start to your evening.


  1. Thx for the update. Market certainly hanging tough.

  2. TJ, with your wave i of c traveling nearly 2/3rds of the way up within triangle, I think you're showing us why the odds of a triangle are actually reduced

    1. Evident that the strong retracement of this morning has left space for a zig-zag. Although a 80% of retracement is surprising.

      The moment is very complexe and interesting. And any easy to analyse.

    2. Look for double-zigzag; will update tonight.

  3. Joe, Sorry for the off-topic comment and requesting clarification. On SPX, I am starting to see the ending diagonal pattern for wave-5 that you mentioned long ago (Dec ' 16), and it seems to have completed at 2453. I was able to verify that wave 1 > wave 3 > wave 5, and wave 2 > wave 4. Is this a valid wave count?

    1. I was not certain that it was a requirement (or optional) for wave 1 and wave 4 to overlap. I was under the impression, for ending diagonals, waves are in 3's and wave 1 > 3 > 5 && 2 > 4.

      SPX - Wave 5 (ending diagonal)::
      0 started at 1810.1
      Wave ((a))-(1) ended 2100 in Apr '16
      Wave ((b))-(1) ended 1990 in Jun '16
      Wave ((c))-(1) ended 2200 in Aug '16

      Wave (2) ended in Nov '16

      Wave ((a))-(3) ended at 2270 in Dec '16
      Wave ((b))-(3) ended at 2260 in Jan '17
      Wave ((c))-(3) ended at 2400 in Mar '17

      Wave (4) ended at 2320 in Apr '17

      Wave (5) ended at 2453 in Jun '17

    2. No, not on such a statement. You would have to tell me the prices that you are thinking for each of the wave terminuses, and where the wave 4 to wave 1 overlap is. Then I'll look it over.

    3. SVS, I looked it over. Clearly you are confused. An ending diagonal must have waves (4) and (1) overlap. That's why I asked. What you are proposing is not valid in any way, shape or manner.