Market Indexes: Major U.S. Equity Indexes closed higher
SPX Candle: Lower High, Higher Low, Higher Close - Inside Candle
FED Posture: Quantitative Tightening (QT)
Yesterday, we suggested readers and wave counters might look for an inside day - a day of consolidation. That is what we got. Here it is, using the daily ES E-mini S&P Futures just to insure all prices are included.
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| ES E-mini S&P500 Futures - Daily - Inside Consolidation Day |
Here is a continued count on the down wave, using the two-hourly futures, the chart starts on the left with the Leading Contracting Diagonal we identified in near-real time for you on the S&P500 Cash 15-minute chart. Then, it continues with a complex wave 2 correction as w-x--y, where only the y wave is a triangle (allowed). Next, there is the long and strong third wave, 3, in five sub-waves, and now a consolidation, likely for wave 4.
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| ES E-min S&P500 Futures - 2 HR Chart - Downward Count |
So far, prices are still channeling well. The next expectation of an impulse lower is for prices to attack the upper channel boundary, and possibly push it out a bit. Right now, the internal structure of wave 4 favors a triangle, as this might help equalize the size of the wave with the size of wave 2, which is quite small. It is hard to be more definitive about which wave of the potential triangle we are in because it's hard to determine yet, if one leg is more than a simple zigzag. IF we are making a running triangle - then just as running triangles were bullish on the way up - they are bearish on the way down. Again, a triangle is a structure that must prove itself, so it needs to form properly in every detail.
Again, under no circumstances can wave 4 up, overlap wave 1, down, and have the wave remain an impulse.
Let's see how it goes. Have a very good start to your evening and to your weekend!
TraderJoe
Nice call on the Dow count a couple of weeks ago. It looks like I was wrong. I thought we had more upside to go.
ReplyDeleteThanks! Much appreciated.
DeleteWhy is a 100 bars not enough? Or do the odds go up that the wave in question wasn't an impulsive wave?
ReplyDeleteIf I look at my 4 week chart I have divergence on the AO. We peak on the 125th bar. Fib retracements from wave 2 are 2506 23% and 2233 38%. I guess you don't like this idea because I know you would have said something.
Thank you for your post!
Because five times 34 (5 * 34) = 170 candles. That is five oscillations around a 34 period exponential moving average, as explained in the featured post.
DeleteTJ with no weekly NYAD divergence and an impulse from 2595 that didn't follow the 8 path method, it is highly unlikely a bear market has begun (20%+ drop). In my opinion, we have begun wave C of a wave 4 expanded flat. A=2533, B=2940, and C=2500ish. In fact, it's not likely a triangle even occurred. They are not common but when they do occur, the thrust out of them is usually swift and fast. There was nothing swift and fast about the wave from 2595.
ReplyDeleteWith that said, can you post the updated weekly chart from 1810 with the proper of # of candles so we can monitor the EWO?
The first part of your statement is not true. There is a weekly divergence with the $NYAD. Use Stockcharts.com, and plot the $NYAD weekly (cumulative), and down in the Indicator section, use 'Price" to overlay the $SPX. You will find on a weekly basis the $SPX made a higher high where the $NYAD did not. That is a weekly divergence.
DeleteI'm not worried about The Eight Fold Path in this instance of the 5th wave. Not all waves follow it. Extended third waves follow it best.
Elliott Wave International now recognize very clearly a triangle on the Dow Composite, and on several other charts. The DOW itself was never claimed to have a triangle. It ended with Minor 4, as (w)-(x)-(y), with (y) lower than (w). Then I showed where wave 5 is a perfect ending expanding diagonal.
As I have stated many times, the problem with a longer expanded flat for Minor 4 is that it will cause a 'degree violation' with Intermediate wave (4) at the the Feb 2016 low. In other words, this down wave would be longer than that one and that is not allowed. It would violate the concept of wave 'degree'. This is what, in fact, led, to the correct prediction that there would be a triangle for Minor 4. Further, my timing here has been just about 'on the dot'. So, that likely means the wave descriptions have been highly accurate.
I have already showed how the weekly chart has the correct number of candles and wave 4 occurred in the correct location on the EWO.
You are correct, there is a 3 week divergence with NYAD. I believe it’s the exact same 3 week divergence we saw in 2015 which led to just a 15% drop and not a ‘bear market’. bear markets usually exhibit a multi month divergence before starting. We’ve seen this type of ‘crash’ 3 times recently (2015, Jan 2016, and Jan/feb 2018) and all 3 times new ATH followed after declines of 15% or less. This will be no different and it won’t violate wave degree with int 4 which was 15.2%. It would have to hit 2436 to match that. I believe this drop will end well short of 2436 despite ideal target being 2390.
Deletehi Joe
ReplyDeletethanks for the update
for you we do not have the most
high and reaches phase V of the
V where it is still possible to make a higher view as the dow jones has finished the iv phase and can do the v?
thank you joe