Market Indexes: Major U.S. Equity Indexes closed mixed
SPX Candle: Lower High, Lower Low, Lower Close - Trend Candle
FED Posture: Quantitative Tightening (QT)
On Tuesday August 28th I wrote in the blog post, "While the exercise continues to be to attempt to count the waves to a top, my market outlook is shifting from neutral to cautious. I am not bullish. I am neutral and wary of a top. (This is not to be taken as trading or investment advice. It is only a sign that most of the countable waves to a top are in place. Not all of them but many of them.)"
Today illustrates why. While the Dow did not make a new lower low today, and made new highs today - not only over that of yesterday but of the day before - the S&P500 not only made new lows today, but also failed to make a higher high day, or exceed the downward hourly trend line we have been writing about in the last few days.
Because of today's downward overlap in the S&P500 cash index, the chart has a revision as follows.
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| S&P500 Cash - Daily - Minute (iii) Completed |
The red daily bars within minuet v have now been designated as sub-minuet waves .ii and .iv within minuet wave v, of wave minute (iii). This means we are likely now in the minute (iv)th wave. And this wave can either be a simple zigzag (sharp) or a triangle to alternate with flat wave for minute (ii). As you know, we don't like to do count revisions, but the overlap in this case requires it, and it seems to fit best with the position of the Elliott Wave Oscillator.
The Elliott Wave Oscillator, is red, declining, but still above zero. The position of the market is decidedly mixed. For example, the Russell 2000 may have topped. Here's why.
On our post of Sunday, August 12th, we outlined the case for a regular contracting triangle in the Russell 2000. You can view the link HERE if you wish. That triangle did complete satisfactorily, including new all time highs. See the chart, below.
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| Russell 2000 - Daily - Triangle Completed |
While there may be one more up wave in the DOW and the S&P, be very careful here as the wave counting is becoming subject to much more error in the larger indexes.
Have a very good start to your evening.
TraderJoe
My 1 week chart clears up what you just said. OBV hasn't diverged yet, maybe it will in the next few weeks. 34 ema sits at 2749 wonder if we get there in a hurry with light volume up.
ReplyDeleteHi Joe, As a student of Elliott Wave Theory and having read through a number of books on the subject I just wanted to say thank you so much for sharing your valuable wisdom.
ReplyDeleteSeeing how you use Elliott wave day to day has been such an eye opener for me, I still have much to learn but as a long term investor it's the big picture and particularly the beginning and ends of major trends that interest me the most.
Thank you for guiding me toward the end of this current bull trend and helping me to identify the top as it occurs, who could ask for more?
Paul (U.K)
Welcome Paul. I'm glad it's helping. It takes a while, but stay with it! And thanks for commenting.
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