Market Indexes: Major U.S. Equity Indexes closed higher; $RUT lower
SPX Candle: Higher High, Higher Low, Higher Close - Trend Candle
FED Posture: Quantitative Tightening (QT)
The market as measured by the S&P500 cash index had another higher high day, and closed higher. It is still trading above the mid-line of the channel. Below is the daily chart of the S&P500 Cash Index for reference.
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| S&P500 Cash Index - Daily - Break Higher of Minute (b) |
Price got high enough today to break the minute (b) wave of the Minor 4 triangle. As long as price is making higher high days, we will continue to count upward. The Elliott Wave Oscillator remains green, and continues to make upward progress. Even the Dow Jones Industrial Average filled a downward gap from June 19 today, but it still has considerable ground to make up.
Various other web-sites are trying anything they can to get in synch with this count. One has a switched from their full-on downward count, to the a message of "the triangle is the best option now". Another site claims they saw a "Leading Diagonal" from the waves since April 1st - but they are only reporting it now in July!. Folks, just like there was no ending diagonal there - as so many were claiming - there is also no leading diagonal there. Both of those counts break specific Elliott Wave rules. They are thinly veiled attempts to get in synch with the count above and reverse engineer a better answer.
Once again, even while the evidence suggests to us that prices are climbing, we are not bullish. We are simply trying to match the evidence with a fifth wave count - an ending type count. And that simply can not be bullish. It is more like looking for the end of a diving board. Prices may or will pop or hop around. We remain neutral and are counting waves as best we can - following the specific rules of wave theory, and using an objective, easy-to-understand method: The Eight Fold Path Method for Counting an Impulse.
With the cash price closer than ever to the 2,839 level, pull-backs can occur at any time. Backing-and-filling is expected. At this time, the advance-decline line may only just be beginning to buckle, but the speculation indexes are not yet where they typically are for a significant decline. Pull-backs, yes. Significant decline? The evidence says not quite yet. But we are "on-watch" for it, and hope to pay attention if it occurs. Meanwhile price evidence continues to point to the upside rather than the downside.
So for now, one can only be patient, calm and flexible as we watch to see if a new all-time high should be made.
Have a good start to your evening.
TraderJoe
Thanks Joe. I am wondering if there is an alternate count that would see us going bearish from here -- the dow jones, and banking sector (UYG), seem less bullish than S&P.
ReplyDeleteAll that is covered above. There is neither evidence nor a compelling count. It is 'possible' but it bucks the odds. I'm not going there yet.
DeleteFriday was the 2nd lowest SPY volume day of the year. Monday and Tuesday were the 3rd and 4th lowest volume days of the year. That's why I am still not a believer that this week's rally was a wave iii of any kind. I count 7 overlapping waves up from 4/2, which I still see as wave Y of a W-X-Y that began at the 2/9 low.
ReplyDeleteSee above.
DeleteThe other argument against the wave iv triangle is that we have yet to have a thrust out of it, yet we're already well beyond the apex of the converging TLs of the supposed triangle. That apex occurred on 6/18.
DeleteNo sorry. You're just trying too hard to be unnecessarily contrary. The $NYAD is at new all time highs. This is Minor 5, regardless if it truncates. It is allowed to truncates.
Deletehttp://fat-pitch.blogspot.com/2018/05/new-highs-in-a-d-line-and-small-cap.html
DeleteWith new local daily highs today (07/17), do you see yet how ridiculous it is to 'guess' at a wave count rather than to follow the simple methodology I have outlined and to base all decisions on the 'bulk' of the evidence, not just one factor or two. "The trend is your friend, until it is not."
DeleteJoe, what if Nasdaq 100 didn’t do a running triangle but a diagonal:
ReplyDelete(i) 9/2-13/3, (ii) 13/3-2/4, (iii) 2/4-20/6, (iv) 20/6-28/6, (v) in progress
I find it interesting that (iii) respects the lenght of (i)
Probably not, because wave (iii) is violated in the NASDAQ 100 futures. It, wave (iii) is longer than (i).
DeleteThat’s correct,
DeleteI have one more..minor 4 as a running flat? I quess you see the flat, and then move (i) to (iii) from previous post. With this count (i) finishes above previous ath. So Nasdaq might be doing (iii) of minor 5 for the moment, this time (iii) is shorter than (i) both in cash and futures.
Not trying to force, if this is correct it wouldn’t mean spx can’t to ath, just trying to figure out why there is such weak momentum.
To keep it simple, as you say ”the trend is your friend until it’s not”, if sp500 closes below the trendline connecting 3/5-28/6 would you consider game over for bulls?
This alternate on Nasdaq is going to be easy to invalidate due to the shallow (ii).
DeleteTrying the 8 Step Method in Stockcharts . . . Stockcharts doesn't provide the Elliott Oscillator . . Can't seem to replicate it with Macd or UltO (see enclosed chart) http://schrts.co/2agJe2
ReplyDeleteUse symbol US500 (Stock Index, not future) on Investing.com and plot their 'Awesome Oscillator' which is the identical indicator.
DeleteIf RUT breaks 7-12 lows than that would be a big concern for me. Or more to the point diverging SPX higher highs.
ReplyDelete