Market Indexes: Major U.S. Equity Indexes closed higher; $Trans lower
SPX Candle: Higher High, Higher Low, Higher Close - Inside Candle
FED Posture: Quantitative Tightening (QT)
There's an old expression, "What's good for the goose is good for the gander". In the last up wave, when we were looking for a potential fourth wave, the market did not hold the 38% Fibonacci level, and that made us suspect more strongly that we were making a flat wave, lower, rather than immediately impulsing up as some other sites suggested.
So, too, we are looking for a fourth wave, this one in the down (excuse the pun) direction, as in this hourly chart of the S&P500 Cash Index.
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| S&P500 Cash Index - Hourly - 38% Retracement |
If the market can hold this 38% retracement level (50% is absolute max), and not overlap wave .i, AND show good alternation with wave .ii, then we may have the makings of a fourth wave .iv coming into place in the lower direction.
For alternation purposes it would be best, since wave .ii is a triple zigzag upward, or in the sharp category of waves, if wave .iv was either a Flat or Triangle - in the sideways category of waves.
You will note that today stopped dead on the 38% retracement level. So all appears well at the moment. A flat or triangle might give the Elliott Wave Oscillator a better excuse (i.e. more time) to reach that +10% to -40% level so often seen in a fourth wave.
Again, the best alternate for this wave is the wave (e) of the much larger triangle we have written about before.
Have a very good start to your evening.
TraderJoe
Joe, another way to count the decline is to call the entire 2791-2699 an expanding diagonal. Wave 1 ended 2762. 3 ended 2743. 5 ended 2699.
ReplyDeleteIf we go straight up to new highs, then the decline would be a C-wave expanding EDT of a running flat. If we go lower than 2699, then the whole thing was an expanding LD to the downside.
Not likely. See the part about wave .ii being a triple zigzag. There are too many overlaps in that wave to count a single zigzag. Also, we got a 'three-of-three' gap where expected.
DeleteOk, so going with your count as it is, why are you taking a fib measurement from 2791-2699 for the suspected wave .iv? Wave .iv should be retracing wave .iii only, not waves .i through .iii....right?
DeleteBecause 38% of the whole wave is often 50% of wave .iii, which would be the maximum limit for a fourth wave. And, at 38%, the wave had not overlapped.
DeleteI like your count. One thing I find interesting, all EW websites have the market going higher soon.
ReplyDeleteI'm using a 30 minute chart right now. If we make a new low than I'll switch to hour chart. I saw rsi diverge on half hour chart plus 160 bars would complete 6-29. The hour chart would have 160 bars 7-16. I like the count however that could open the door to having full daily candles under the 200 ma. Next week could be slow. Think wife and I will be only people not taking some vacation next week.
ReplyDeleteYour recent top call on crude oil appears to be very tenuous.
ReplyDeleteYes, in fact the high busted within the last couple of hours. At least in the recent wave structure we were counting upward (as the flat which had not finished). SO, it's back to the drawing board on that one - even though the diagonal was a true diagonal and was exceeded lower.
DeleteLike your sp wave 4 here..does v need to exceed iii to complete?
ReplyDelete