Tuesday, November 13, 2018

Lower Lows

Market Outlook: Likely Long Term Top Identified, Now likely in Minute ((ii)), up
Market Indexes: Major U.S. Equity Indexes closed lower
SPX Candle: Lower High, Lower Low, Lower Close - Trend Candle
FED Posture: Quantitative Tightening (QT)

Yesterday's three waves down as ((A)), ((B)), ((C)) converted to ((1)), ((2)), ((3)) down, as today there were a lower series of lows. Not to worry, we had warned readers and commenters, not to begin any up count until or unless the high of ((B)), now ((2)), was exceeded higher. It wasn't.

Here is  the S&P500 15-minute cash chart, so you can follow along.

S&P500 Cash Index - Fifteen Minute - Impulse


With the first new low, we were able to rearrange yesterday's potential barrier triangle, to a "running triangle" preserving the proper degree labeling on the chart. This allowed (5) < (3) < (1).

We also gave instructions for re-drawing the potential down trend line from the FLAT wave ((2)) to the new wave ((4)) high that occurred today. As a result, there was excellent alternation with a long in time wave ((2)) flat, and a short in time wave ((4)) sharp. Then, there was another lower low, and it appears to be a fifth wave at approximately ((5)) = ((1)).

Looking at the EWO signature on the 15-minute chart, then currently you have (3) of ((3)) on the low of the EWO, ((3)) on last night's and today's continuing divergence, and ((4)) above the zero line. And now five down ((5)) would be on another divergence.

Sounds like The Eight Fold Path Method to the tee. As of this time ((5)) = ((1)).


The key to the count was uncovering the running triangle or else a) the wave degrees would not have worked out properly, and b) the implications of a "running triangle" with a lower B wave are bearish. And it projected today's lower low.

Prices have not broken 2,700 yet, and there are now several possible counts depending on whether that is broken or not. We'll have to simply reserve judgement until that does or does not occur. To avoid some questions the biggest possibilities are:

  1. We have seen the top of minute ((ii)); and this is the first impulse down; need to break 2,700 for that.
  2. We have seen only the c wave of a larger ((B)) wave flat, and (c) of minute ((ii)) up is yet to come; need to hold above 2700 for that.
  3. A retracement occurs and fails, and we go back to the 2,600 lows as a FLAT. Then a final (c) wave up of minute ((ii)).
Those are very hard to sort out at this time. Additional waves are needed.

Have good evening,
TraderJoe


42 comments:

  1. hi joe thank you for your work
    it gets complicated with waves 15 minutes
    you can make a daily chart to better understand where we are right now
    thank you

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    1. thanks, but sorry, not until 2,700 is lost or not; there are too many possible patterns.

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    2. Additions to the post were made after the close.

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  2. thanks joe
    your daily "titles" to the blog support the notion less is more

    ReplyDelete
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    1. Additions to the post were made after the close.

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  3. Thanks for great work! so great it could go up or go down. Will have to wait....

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    1. The market is being a pill, but after "five down" is complete, then "at least" three up should follow. Right? Let's make sure five-down is complete first.

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  4. Is there a pattern where we can fall below 2603.54 and go to say 2523 before taking out 2815.15 and then once we hit 2523 we reverse and exceed 2815.15 without making an all time high and then we sell off below down below 2523 into 1h of 2019? i think Elliott allows this but i need ask you, Joe.

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    1. A FLAT for minute (ii) could go lower than 2603. How far has to be looked at in terms of degree labeling.

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  5. Prices have gapped up this morning, and are currently above and back-testing the upper declining channel line. Similar to previous guidance, upward counting may begin when the last fractal up is exceeded. In this case, it is wave ((4)).

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    1. The rationale is thus .. "what if wave ((4)) decides to become a longer in time triangle than wave ((2)), to try to get the market down below 2,700". This is possible and certainly not required.

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    2. This would be the (b) wave of such a triangle?
      Thanks!

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  6. Joe,
    You keep referring to breaking 2700. I see that 2700 is the bottom of the small minuette b, but I don't understand or perhaps I missed the EW significance of that. Could you enlighten me on this?

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    1. It is the 100% retrace of the entire second up leg, and is shown as so on the the fifteen minute chart above.

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  7. There is a new lower low this morning, and this is why, we do not count upward until the high of ((4)) is exceeded.

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    1. Triangle for wave ((4)), a larger degree triangle, could be (A) = 2,755, (B) = 2,715, (C) = 2,748, (D) = 2,727, (E) = 2,734; would explain the more violent down move from 2,734.

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    2. If the EWO pattern breaks lower than the prior ((3)), we will consider that the original "five down" is a larger A wave, and this is a larger C wave down, with this morning as a three-wave B, up. But, that judgement will not be made until days' end. Next target for an impulse is 0.618 time net distance traveled in waves ((1))-through-((3)).

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  8. this is not about spx currently but a question if a guideline or rule exists. say I drew a line from 0 to 2 and all of 3 is above it so far so good now how low can a 4 go below that line before something is awry

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    1. The Eight Fold Path Methods answers that question. Of course, wave 1 may not be overlapped (except in a diagonal), and for an impulse wave a 50% retrace on wave 3 is 'pushing it'. But the 'official' answer has to be that wave 1 may not be overlapped by rule.

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  9. If we look at the move down from the HOD on a 1 minute chart (around 130 bars) we have 3 waves down with what looks like a forming 4th. It seems to look good on the EWO. A small 5th could take us into the 2700 range a large 5th would violate it.

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    1. Problem is, one can't have had two flat waves in sequence, waves ((2)) and ((4)) of the same degree should not both be flats with lower (B) waves by the principle of alternation. Having one as a triangle, or their being a higher degree B wave or flat B wave is acceptable, however. Same principles that applied at the high, apply here.

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  10. Looks like a small ED down forming from 2712

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  11. Seeing ending contracting diagonal starting at 12.20 & ending at 13.10 EST. Will be invalidated if new low is taken out.

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  12. Price right now is at 2,689; hourly gap fill would be at 2,682.63; we're not there yet.

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    1. We've had some upward overlap. It is not definitive, but it might be the end of a B wave down for a FLAT. Overall, though, at the moment, the ES daily has negative bias with price below the 18-day SMA.

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    2. yeah, it bothers me that the move up off of the bottom is only a 3 on the 1 min chart.

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  13. Just now on CNBC Art Cashin was asked about end of year seasonality and his reply was that for right now we have to put Santa Clause"s picture on a milk carton. LOL Love that guy!

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  14. At 2,614, we are now back up over the upper down channel line. Looking like a flat wave to me. Still bearish in its implications.

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    1. Now up over 2,715 the previous (X) wave within a (W)-(X)-(Y) of a ((B))wave lower.

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    2. Nice job nailing that , does that have to put a new low ?

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  15. Hi Joe,

    I was going to ask if you could revisit a long term monthly chart for the major indices but I'm betting you'd prefer to see more of this downtrend play out first. I've tried using the search box and cannot find it. I know they were in some of your videos but pretty sure those are inaccessible. Can you please point me to a time frame to search?

    Thank you!

    Andrew E

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    1. Perhaps this will help.
      https://studyofcycles.blogspot.com/2018/10/elliott-wave-video.html

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    2. Thanks PT, already saw that one though. Was looking for a count since the Great Depression. Maybe I saw it someplace else.

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