Sunday, March 4, 2018

How You Can Tell - 2

There are any number of people who want to count the up movement from February 9th as a "five wave movement". And, "on the surface" it's looks like there are five non-overlapping waves - even though my published count differed greatly. In fact, I had showed how the a wave up, shown below, counted best as a wedge-shaped non-overlapping impulse. That chart may be found at this LINK.

So I decided this morning to look at the whole up wave using The Eight Fold Path Methodology and to let it be the arbiter. Here is the chart that results.

SP500 Cash - Half Hourly - The Eight Fold Path

If you have studied The Eight Fold Path Methodology, you can see instantly that many of the elements of that method are missing. With 140 candles on the half-hourly chart (well within the required 120 - 160 candles), then the SP500 30-minute chart is the applicable time frame for this "wave under study."

  1. First and foremost, there is no higher momentum in the middle of a "third wave". This is critical as a third wave does not have the right momentum measurements on the Elliott Wave Oscillator (EWO or AO in this chart).
  2. The move does not channel well at all.
  3. The b wave, or what would be the fourth in an impulse is much larger in point size than the potential second wave ending at the end of the day on 13 Feb. Usually, they are similar.
  4. If you draw an initial channel surrounding 9 Feb and 13 Feb as a lower channel boundary, no wave exceeds the upper channel boundary - which would be characteristic of a third wave.
  5. The call of an "a" wave up from 9 Feb, resulted in calling an 'exact' turn for the "b" wave. This refers to the same chart in the link above.
No, from everything I can tell. This is not an impulse wave up, based on a specific, objective, and predefined methodology. It has neither the right look, nor the right momentum measurements for an impulse. Further, such a count has already caused another web-site to improperly diagnose the nature of the wave, and be surprised with the recent price weakness.

So, that should help eliminate some of the options. The best alternate to this count is that b is .a of a flat, and c is .b of a flat. Then, Friday's down move is .c of the flat.

P.S. Another dead give-away: where is the 1.618 x 1 wave?

Hope this helps.
TraderJoe
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8 comments:

  1. Pittsburgh TomMarch 4, 2018 at 12:58 PM

    Hi Joe,
    You seem to be doing a great deal of work since your return and wanted to express appreciation for that.
    I also wanted to contribute to the conversation started by Mikeoak yesterday. I was a little confused by one of your replies so perhaps I am missing something, but the section on Charting Waves in chapter 2 of EWP book would seem to support Mike's point that in comparing waves on any time scale greater than hourly, the percentage method is the correct comparison.

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    1. Elliott_TraderMarch 4, 2018 at 2:47 PM

      Tom. I am well aware of the purpose of log charting (percentage), and Fibonacci percentage retracements within a wave. That is not the issue here. As Minor 4, the wave made 38% down and is longer than wave 2. It 'can' be a minor wave 4, but it is also longer in points than Primary [4] which happened only two years ago under a condition of almost no inflation - which is why Elliott used log charts, as you can read in his own words. Therefore, a Minor 4 being longer in points than Primary [4] is a 'warning', and a significant warning. I never said it was a sole determining factor. It 'may' violate degree labels if it doesn't form a triangle. If it forms a triangle there will be absolutely no issue with Minor 4 because a triangle is 'always' measured to it's (e) wave which will be higher than the lowest low within Minor 4.

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  2. 6QMarch 4, 2018 at 12:58 PM

    Thank you Joe, great posts as always !

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  3. DrewMarch 4, 2018 at 1:57 PM

    Very much appreciated Joe. Hope your jury duty was at least interesting.

    Regarding the 5th wave that began in Feb 2016, if the top is in as you stated was possible, how does that jive with the chart you posted on January 28, 2018?

    Thank you as always for all you do!

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    1. Elliott_TraderMarch 4, 2018 at 2:59 PM

      Hi Andy. Yes, Unfortunately jury duty was interesting. Too much crime. I assume you are referring to the blue [5] published in yesterday's post in the chart labeled Impulse? If so, that is the 'end' of the Primary [5]th wave meaning the bull market with the extended fifth wave scenario that I published in the year-end video on Dec 31st (still available in this blog), and located at 15:40+ within that video.

      And welcome.

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  4. AnonymousMarch 5, 2018 at 12:42 PM

    In my opinion I think we are in a Wave 4 triangle. Mostly because this will be the perfect setup for a divergence with the NYAD that you see at most all major market tops. Wave 5 in the index's will form a new high likely and the NYAD will not make a new high. Or maybe it's different this time and the market keeps marching on forever ;-). Anyways I'm all in short term (3-6 months) bonds until this bubble bottoms out someday and I see the index's trading at a more fair value than the ridiculous multiples they are at now. Thanks for the posts Joe!

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    1. Elliott_TraderMarch 5, 2018 at 3:27 PM

      Welcome Steve. Today provides slightly more evidence for that triangle, with it's higher high day.

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