Market Indexes: Major U.S. Equity Indexes closed higher
SPX Candle: Higher High, Lower Low, Higher Close - Outside Candle
FED Posture: Quantitative Tightening (QT)
By the narrowest of margins, the S&P500 Cash Index, and the ES E-Mini S&P 500 futures missed making a new low today, and instead turned higher and closed higher. That leaves the chart looking the following.
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| ES E-Mini S&P500 Cash Index - Daily - Potential Triangle |
The whippy action continues to feel like a triangle. The downward count from (b) remains bothersome, but price did what it did and closed a gap today. With the daily slow stochastic turning up, it would not be surprising to see price and the 18-day SMA try to come together (including the necessary backing-and-filling).
In the chat room today, we were able to count five waves up, but with no divergence on the EWO. So, it is likely there is more ahead - at some point in the future.
The DOW, of course, made a new low at (c). It might be possible to count the DJIA, then, as a double zigzag down from the high to (c). There is also a "trap" count that I will try to cover this weekend. It involves counting the DOW downward as 1-w-x-y-2. If the DOW can make no progress above the 62% Fibonacci retracement, then this count may apply to it.
Right now what we know is that the downward wave to (c) took more time than the downward wave to (a). This helps fulfill a triangle's expectations. And it is less evidence for the EWI style 1-2-i-ii downward count at this time because there should be acceleration in a third wave. It should not be slower!
Usually, the (a) wave in a contracting triangle is the most violent. So far, that would hold true. Yes, the price bias is still down as it is below the 18-day SMA, and, yet, price did rise. This is a clear example of what I indicated in my blog two days ago. Further, we know that if the low of an outside day up is exceeded lower in the next two days then, and only then, would it be considered a trap for the bulls.
And while the swing line looks to be turning up, it is still negated by price being under the 18-day SMA. Today would also be an example of Ira's caution against selling short against a lower daily Bollinger Band with the daily slow stochastic in over-sold territory (this is not trading or investment advice; it is just an example of when one of Ira Epstein's cautions has come true).
Meanwhile, let's see how far up this wave gets, and stay clam, flexible, and patient. Fourth waves can be real teasers and very testy!.
So have a good start to your evening.
TraderJoe
I only see 2 possible counts from the 3/13 high:
ReplyDelete1) Wave a at the 3/23 low, wave b at the 3/27 high, and a c wave EDT that completed with a truncation at this morning's opening low.
or
2) Wave a at the 3/23 low, and then an expanded flat wave b that either finished at today's high, or still has a little more to go before it's finished.
How about a truncated flat b wave that ended on 3/29, and the c wave is the next bar down. Who says b waves can not be running flats?
DeleteOf course b waves can be running flats or truncated flats, and what I described in my 2nd option is currently a running flat as of today's close. The reason I don't think Monday's low was the end of the whole move down is because the move up from Monday's low to yesterday's high was an abc in all indexes, and the NQ futures made a lower low this morning.
DeleteSalut joe la phase 4 est compliqué
ReplyDeleteEst ce qu'il est possible de faire un plus bas encore avant de faire la phase 5 ?
D'après toi la phase 5 peut durer combien de temps ? merci
Oui c'est possible. Habituellement 5 = 1
DeleteHi Joe I think the count for the Dow can apply to the DAX as the latter also did not retrace above 62%. 1,w, x and y under development As usual would be great to have your insight about it...
ReplyDeleteHi Brian. It's a contingent count (i.e. alternate) only at this time, as long as the SP500 remains in a triangle. I will try to explore it more this weekend.
DeleteBy the way, is it compulsory to have a 62% retrace for the formation of a triangle? Or otherwise a minimum retracement. Secondly can wave A of a triangle be a flat, where minor (b) exceeds the begining of minor (a)....Many thanks and regards
DeleteHi Brian. It's pretty hard to get triangles without a 62% retrace. That said, there is no Elliott Wave rule to that effect that I know of. Prechter says one leg of a triangle can be "something else" other than a simple zz; usually a dzz. Neely says explicitly one leg of a triangle can be a flat, usually the A wave. Hope this helps.
DeleteAs usual it helps Joe, Thanks
DeleteThanks for your response Joe. Looking forward to seeing your insight during the WE. Cheers
ReplyDelete