Market Indexes: Major U.S. Equity Indexes closed higher; DJUtil lower
SPX Candle: Higher High, Higher Low, Higher Close - Doji Candle
FED Posture: Quantitative Tightening (QT)
Proving out the value of The Eight Fold Path Methodology, the cash S&P500 Index made a new intraday all-time-high today. The market gapped up at the open, traded up to 2,873.23, breaking the old high of 2,872.87 and then fell prey to some profit taking, still ending up on the day. Still, it was good enough to clearly indicate the triangle scenario for a Minor 4th wave was correct.
We consider this a major success as several other websites and some major Elliott Wave services were posting outright bearish counts, as were several wave counters who read this site trying so hard to convince us of. It's possible the Dow will not make a new high, but the evidence is not leaning that way yet.
Here is the daily chart of the cash S&P500 Index for reference.
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| S&P500 Cash Index - Daily - New All Time High |
Also, by price trading above the blue .b wave above, it proved out that the triangle scenario was correct for that wave, as well. Since, price has established that we are now in the Minor 5 wave, we have included it on the chart. The importance of today is that the last of the gaps to the upside were technically filled today, and now all of the gaps are clearly below the market. This does not mean upside price movement can't continue higher. It also does not mean we can't gap higher. It just means we should have on our radar the possibility of an outside key reversal day down - or other bar - that does not leave a gap at the top of the market to begin the larger wave down. When that bar occurs, it will be significant. It may be days or weeks off yet.
Now the task will become to do what we can to find that top. This can go in one of a few finite ways. Price can continue in an impulse. This seems most likely, and price can attack the upper channel line yet. If you are interested in the other possibilities, then let us know what you think of our wave counting method, which is freely disclosed for you, and we'll see about including the alternatives in a later post. Remember, we even told you in advance, our rationale why a triangle scenario for Minor 4 would be the best path from an Elliott Wave counting perspective. No one else - no other web-site, and no other Elliott Wave service we are aware of did that for you, in advance, and had it be correct.
Thanks for reading. Thanks for hanging in. Patience, flexibility and calm have paid off yet again.
Have a good start to your evening.
TraderJoe
Congratulations from the UK
ReplyDeleteThanks for being the first!
DeleteET,
ReplyDeleteI just noticed DJI has a double divergence with the AO. Futures YM does as well. SPX and ES only have single divergence with AO. Just to be clear I look for divergence where the AO has not crossed the 0 line. Typically when the 0 line is crossed we have a degree change. Also I'll have to watch tomorrow for a bearish twin peaks if AO turns red after today's price bar. Looks like RUT popped out of it's triangle.
Sounds good Bill.
DeleteNice array of shooting stars on the DJIA, S&P500, and QQQs today. Looked like a small meteor shower. Tomorrow should be interesting.
ReplyDeleteCan go into a pull-back at any time.
DeleteIncredible, beautiful work as always.
ReplyDeleteHow great of you to say. Many thanks!
DeleteCongrats from Sweden, outstanding forecast. Ewi has a few things to learn from you!
ReplyDeleteThanks I have corresponded with two of the principals there.
DeleteI'm probably way off base here, but if I look at the SPX on a 4hr chart, your triangle certainly looks like a diagonal (parallel channel), beginning with the peak on 7/25. This would be 1. Each move down and up from there are 3 wave moves (as a diagonal should be), with the latest rally being 5 in progress. The last bar (candle) is a reversal of the previous up candle (which took us to channel top). This seems to be a clear rising channel consisting of 5 3-wave moves, indicative of a diagonal (to me at least). The Osc shows consecutive diverging lower peaks as I would expect to see in a diagonal (just like a rising/falling wedge). fwiw.
ReplyDeleteI have addressed where diagonals fall in a previous post on CL. Usually diagonals don't occur immediately after wave four triangles (Minor 4 in this case), because the two patterns (diagonals, and triangles) are "cousins" made up of the same five-wave pattern with three-wave internals. It would be poor alternation for one to follow the other.
DeleteI maybe didn't clarify enough. Essentially, it appears that in place of your triangle (on the 4hr chart) I can identify a rising 5 "wave" channel. It's not after the triangle, it is in place of. Channels are pretty straight forward. I would post a chart but apparently that's not an option. No matter though, it's just something that I see clearly (regardless of where it might be within the move up). Again, just my take. Thanks for your response.
DeleteVery difficult to count that first wave in your scenario as an impulse. Try the Eight Fold Path on it. It doesn't work. Hence, that's what told me it was still part of the triangle.
DeleteHi Joe,
ReplyDeleteGood Evening!
As always thanks for sharing.
If a pull back tomorrow, what will be the target? and how many days it will last likely?
Thank you!
It could be a wave .ii of v. So, it just could not exceed the .e wave low
DeleteHi Joe,
ReplyDeleteI have the following dummy questions:
1. When people are talking about 38.2% pull back, are they referring from last low, which is 2802, right?
2. if 38.2% pull back meets, which is about 2845/46, next one should be 50%?
3. The MACD is still negative, if tomorrow it pull back more than 10 points, can the current up trend done?
Hi David. Very terrible question to start with, "When people ..". What do I know of who you are listening to or what they mean? Please do not put me in that position. Normally, a 38% pull-back refers to the 'typical' depth of a wave fourth retracement compared to the length of the entire prior third wave. I won't answer more than that now.
DeleteHey TJ. Someone is using your chart above on Caldaro OEW site.
ReplyDeleteThanks for letting me know.
DeleteThanks Joe, great work. I started counting the start of minor wave v impulse with the e-minis.
ReplyDelete- I believe we just finished minor (((iii))) of ((i)) of v today, and are working on wave (((iv))). The EWO peaked last thursday at 2850, and made a secondary low today. As of now, wave(((iv))) crossed the zero line as well.
I would appreciate your insight (if you can make time) so I can corroborate if I am going on the right track. Thanks a lot and really appreciate your help.
Hi SVS. Sorry. But I won't answer this question because your wave degrees are way off. There is no such thing as a minor (((iii))). I have showed you where Minor 3 is, back at the December high.
DeleteThanks for posting and I continue to learn how to be patient and flexible. I am getting there with charting. Trading is another skill altogether. Question on your chart, if this is a 5th wave - does it concern you the EWO peaks are during the corrective waves instead of 3 of 3?
ReplyDeleteHi Paul & welcome. Please re-read The Eight Fold Path Method. The first step is to chose the time frame that provides 120 - 160 candles for the wave of interest. On the daily chart you are seeing the phenomenon of lower EWO peaks, but there are only 79 candles. What happens when you switch to a 12, 8, or 4 hr chart to get the required number of candles?
Deleteyeah, thats the problem, my software does not have the EWO. I use MACD as a "poor" proxy until I can get aligned.
DeleteSuggest using Investing.com (I have no interest in it), and plot US500, the Index, not the future, which is the S&P500 cash. You can pick intraday time frames, and plot their Awesome Oscillator (AO) which is identically the same as the Elliott Wave Oscillator, until you can get your software to do what you need.
DeleteI went back and reread all the posts in Jan - April last night. It was good to review my notes of the time and determine if I was also thinking objectively about the form / possibilities of the decline. Thanks for keeping these available.
ReplyDeleteSure.
DeleteAlso, does not look like your link to (Atom) is working any longer.
ReplyDeleteThanks. Please send me an email at the profile address, and tell me how you know. (What symptoms are you seeing?)
Delete