Market Indexes: Major U.S. Equity Indexes closed lower
SPX Candle: Lower High, Lower Low, Lower Close - Doji Candle
FED Posture: Quantitative Tightening (QT)
The equity markets on Thursday and Friday were trading about 2.7 & 2.9 billion shares respectively (light) on the NYSE, and we termed the price action flaky. With another day in the 3.0 billion share range price action remained flaky.
The market, as measured by the S&P500 cash index, closed Friday at 2,901, and was not open for business on Monday. Due to weekend news, the market gapped down at the open four points to 2,897, and continued to trade down to 2,886 (down -15 pts). At 10 pm, the morning economic numbers were published and, while the ISM Index was much higher than expected (61.3 vs 58.1), Construction Spending was much lighter than expected, up only 0.1% vs 0,5% expected. Stocks then staged a rally attempt that failed to close the opening gap, getting to only 2,900, and then began to fall off again, making a new lower low at 2,885. Beginning around 12:15 pm ET, again, stocks staged another rally attempt but fell short of closing the gap again, closing the day at 2,897.
Here is the daily chart of the cash S&P500 Index for reference.
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| S&P500 Cash Index - Daily - Another Flaky Day |
Today's red price candle is a doji candle, and 'possibly' a weak hammer candle, as it did not close green. The low of the candle is at the prior gap support from wave .iii, and measures just 50% x wave .iii with no overlap on wave .i (in the S&P). The 50% level is about the limit for a fourth wave.
There is a clear line down from the tops of the four daily candles, and the first step to resuming minuet wave v up is to exceed that line (draw it out on a 15-minute cash chart for practice).
The Elliott Wave Oscillator turned in a red histogram today, but that is not unexpected given the price action. Remember, the all-important payroll report is at the end of the week.
Have a good start to your evening and to your week.
TraderJoe
Thank you Joe, you deserve the timing award 2018!
ReplyDeleteNice to hear. You're welcome, too!
DeleteHi Joe. Thanks so much for these insightful lessons!
ReplyDeleteA few EW analysts are counting us as concluding a primary third wave (instead of your fifth) with a a primary fourth and fifth still to come and I was wondering about your view of that idea. Thanks!