Market Indexes: Major U.S. Equity Indexes closed lower; DJUtil, DJTrans, RUT higher
SPX Candle: Lower High, Higher Low, Lower Close - Inside Candle
FED Posture: Quantitative Tightening (QT)
From the Friday and weekend posts, you will have read we are expecting a consolidation at lower levels. So far, we are getting that, and it tilts the odds in the downward direction - at least temporarily. Below is a continued chart on the ES E-Mini S&P500 Futures, so you can see that, as of now, nothing has changed.
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| ES E-Mini S&P500 Futures - 2 Hr - Potential Running Triangle |
As of this writing, a potential running triangle remains in tact. Today it found upward resistance on the upper edge of the declining Elliott parallel trend channel, and was attacking it as we delineate in The Eight Fold Path Methodology.
The triangle remains a potential. It must prove itself in every detail. There is already one way to count such a triangle as complete. Just slide the (c) wave over to the 12 Oct high, and slide the (d) wave over to the 12 Oct low. That would leave today's high as the (e) wave - which breaks no rules or guidelines. The reason it is labeled as above is that this looks better in the cash market. So, the (d) wave could still break down a bit, and then an (e) wave upward take over.
Kindly remember three details of potential running triangles. First, the upward (e) wave must overlap wave iii wave. If the (e) wave ended today, it does this already. If it ends, tomorrow, such an overlap would be expected. Second, running triangles, with their lower (b) waves are bearish structures - at least temporarily. Running triangles with their higher b waves are bullish in bull markets. Running triangles with lower b waves are bearish in bear markets. IF this triangle completes successfully it will be giving us a very big clue. (This is not trading or investment advice - just a description of how running triangles operate in various markets, as best I understand it). Third, and finally, the usual technical analysis target for a triangle is the widest width of the triangle added to the breakout point, or breakdown point in this case. If this occurs, it would target at least a new low from the current triangle width.
So, stay tuned. Let's be patient, flexible and calm, and lets see if a triangle forms properly, and if it does, then does a clean lower low form for a fifth wave down?
Have a good evening, and a good start to the week.
TraderJoe
Joe from the highest point of the triangle to the lowest point is close to 100 points am i counting this right,,Thanks
ReplyDeleteYup. Welcome.
DeleteET,
ReplyDeleteGreat video!
Here is what I'm watching before I put on my bear hat. First we know the daily trend broke after the AO crossed below 0. So now I turn my attention to the weekly chart. Both Dow and S&P are hanging at the balance line (alligator jaw, blue line). We are still above the weekly lower trend line. The SPX AC indicator now has it's 4th red bar with 2 bars below the 0 line. As best I can tell at this point we need to close this week below 2710.51 (last weeks low) If we do that, we should have confirmed a close below the trend line. We would also be outside of the alligator pulling away from the balance line. Dow follows this as well but with just 3 red AC bars and 1 below 0 line.
Bottom line this is a good week to watch and don't trade.
Thank you for you blog!
Good analysis. Keep it up & thanks!
DeleteThanks a lot for your great work! How high do you think is the chance that we directly go down to ~2500 in wave 5 of this impuls?
ReplyDeleteWelcome. Let's see if a new low is made first. There is a way a longer wave v could happen, but first let's see if a new low is made. This is because the triangle is still a 'potential' triangle and must not break above 2,800 first.
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ReplyDeleteIf you drew a horiz line at the 2780 level, I believe we would see resistance there. I would view this as an ascending triangle. Seeing selloff as an "abc", possible leg "a".
ReplyDeleteStill holding possibility of expanding diagonal (selloff being w4 of w5), or flat (regular or expanding). Seems the quality of an ensuing rally will help shed light. (imho).