Market Indexes: Major U.S. Equity Indexes closed significantly lower
SPX Candle: Lower High, Lower Low, Lower Close - Trend Candle
FED Posture: Quantitative Tightening (QT)
If you have not seen this morning's update on Crude Oil, you can view it below this post. In the equity markets, today was a lower low day, some consolidation, and a further lower low. From the standpoint of an impulse wave, the overlap means that the impulse ended with the earlier description we discussed yesterday. We'll show that count on the daily chart, below.
 |
| S&P500 Cash Index - Daily - Terminal Count |
Nothing breaks the rules in this count, but from Minor 4, there are only 105 candles, not the required 120 - 140 needed to follow The Eight Fold Path Method. So, we conclude this wave just doesn't follow it.
Although there are other ways to count the index to a new all-time high, they would both be diagonal counts. One would be a contracting diagonal, with this as wave ((ii)), lower. And one would be an expanding diagonal, with this as wave ((iv)) lower. And, they both would rely on prices first breaking 2,900 on the upside.
Because of that and the fact that there is already a clear diagonal on the daily chart, above, the odds favor further downside (this is not trading or investment advice). Also, there can be no suggestion of a turn higher until there are candles on the chart that have higher high days. Right now, the candles have lower lows.
So far, the downward wave looks best counted as three waves down. Let's see if there is a consolidation for a fourth wave, and a fifth wave lower. If so, that would likely rule out one upward diagonal scenarios. In the case of the expanding diagonal, in no case could the current minute ((ii)) wave be exceeded lower. In the case of the contracting diagonal, of course, in no case could the Minor 4 be exceeded lower.
I will not be writing about diagonals again until or unless prices close above 2,900. They are possible, but they fight the odds at this point.
Have a good rest of the day and a great start to your evening.
TraderJoe
hi Joe
ReplyDeletebig change in the graph
is phase v definitive and complete
or there is still a chance that the iv phase is finished
Thanks Joe. Be interesting to see what comes next after this long ten year climb if it is over.
ReplyDeleteWelcome. Sure will be.
Deleteso theoretically the V phase of the V is finite
ReplyDeletenow we are entering a bear market
That is currently most probable. Be flexible and patient.
Deleteall time frames ruled out 4 with EWO days ago. thats why i calculated close of 2855 onver weekend knowng lower closes would soon drive daily EWO past 4th wave levels. So only thing that would throw off a lot of people is if its just 1 of 5 up and we are in 2 for extension. perhaps an option?.
ReplyDeleteand thanks i forgot to say that sorry
DeleteThat should be evaluated versus the position of the RUT, and NDX as well. And welcome.
DeleteOnly the January low is definitive. But, the minute ((e)) wave of the Minor 4 triangle would likely be pret-ty darn close.
ReplyDeleteDo you mean Feb 9th low at 2532?
ReplyDeleteJoe,
ReplyDeleteI have been trying to understand your comment "we conclude this wave doe not follow it" about minor 4 to our current wave not being within the 120-140 candles and being at 105. I understand the mathematical importance of being between 120-160. Are you saying that this wave is not done yet and needs more candles and patience to analyze the current wave? Or are we to conclude that this wave simply will not follow the 120-160?
I also would like to know where you start your 120-160 count to get 105? I started on May 3rd and currently (including today) I count 113 for the US500 and 116 for the US500 Futures. I am just trying to figure out where to start the candle count.
Thank you so much for doing this blog it is very well done.
Tim
03 May '18 low to 03 Oct '18 high = 106 candles, in either cash or futures. You are probably using a free program like Trading View or Investing.com which puts in extra candles for the Sunday night futures session. That's a no-no. They are not using the official stats.
DeleteThis comment has been removed by the author.
DeleteJoe,
DeleteThanks... I was using investing.com and did not realize the extra candles. I will now eliminate them with some better software. I also did not count the start and ending of the candles correctly. Giving me the dates you counted make sense and helps. This counting brings me to my other question. By what you mean by "we conclude this wave does not follow it."
Do you mean that the cycle that we are currently in is possibly incomplete because we are not in the 120 to 160 range so therefore this is a corrective wave 4 (with a circle) that is allowed to overlap 1 (with a circle)? Or are you saying that basically the 120-160 range is a guideline for a cycle as opposed to a rule that the cycles follow?
Thanks
Tim
Yes.
ReplyDelete