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| S&P500 Cash Index - Daily - New Channel |
Since exiting the smaller triangle at minute (e), which ended wave Minor 4, the cash index has now formed a new tentative channel upward. On Friday, price closed the downward gap shown in black circle on the price chart. But there are many open gaps - only some of which are shown - denoted by the red circles.
For the EW purists, the correction is likely a 'complex flat' which is composed of a flat-x-zigzag, with the waves in the week prior the holiday as a zigzag, and that flat technically having ended with the diagonal we showed in prior posts. The zigzag was needed to extend price lower so that minute (ii) would overlap downward with minute (i) within Minor 5.
Price is currently trading very near the (dotted) median line of the tentative channel. Trading above, and closing above, the median line would be a positive. Trading below the lower green channel or closing below it would be a warning.
It looks like the Elliott Wave Oscillator made a second wave signature, with a slightly lower low than Minor 4, and it is now green and rising. Even though things are working out well, it is still time to be flexible, patient and cautious - as a very significant risk is other market sectors (e.g. Russell 2000, NASDAQ 100) might not hold up as well.
As we warned last weekend, Crude Oil did indeed upwardly overlap the $75.00 level. So we are glad we provided a preview of what one might expect.
Have a very good weekend!
TraderJoe
That might make a little more sense with mid-term elections, and all.
ReplyDeleteI have a hard time counting the ending diagonal of the flat, did it truncate?
ReplyDeleteErik
Using the hourly chart.
DeleteJune 13 - 15, (i). June 15, (ii), June 15 - June 19, (iii) longer than (i). June 20, (iv) longer than (ii). June 20 - June 25, '-a' of (v). June 25 - 27, '-b' of (v), and June 27 - June 28 is '-c' of (v). And (v) is longer than (iii) meeting all the requirements of an ending expanding diagonal. All zigzags.
So, the whole flat can we counted as a-b-c, where 'c' is the expanding diagonal with the dates as in this note, to minute (ii) or as w-x-y of minute (ii). Either way works.
Joe, you previously said in your June 26th post that the 6/19-6/20 rally was a triple zigzag and therefore could not be part of a diagonal. What changed? Can double and triple zigzags be part of a diagonal now? Thanks.
DeleteThanks for describing in such a detail, that’s a nice exp diagonal. Pretty happy I sticked to my short stop loss...With this count it looks like spx subdivided before breaking out Friday, if so momentum should keep expanding this week as you already noticed.
ReplyDeleteOther than ADX falling below 25 for Russell 2000 strength looks good. AO above 0 with upper bollinger band expanding. Am I missing something?
ReplyDelete