Market Indexes: Major U.S. Equity Indexes closed higher; DJUtil lower
SPX Candle: Higher High, Higher Low, Higher Close - Trend Candle
FED Posture: Quantitative Tightening (QT)
It took a while today, but most major indexes and futures made the new highs indicating a fifth wave higher. There was just enough 'first of the month fund inflows' to make the fifth wave. I had showed the first four waves on yesterday's five-minute chart. I had said the fourth wave down didn't have to be over - it could make a slightly lower low: it did. Then, the grinding up trend for the fifth wave began.
That being the case, we are likely in a minuet ((A)) wave higher of what should turn out to be an a-b-c sequence for a minute second wave up. Refer to the hourly chart below.
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| S&P500 Cash Index - Hourly - Five waves up to ((A)) |
Because 'the trend is your friend', we should not assume the upward ((A)) wave is over. It could be, but it doesn't have to be. We should let the market tell us that it is. Confirmation would come below 2,704 in the ES futures. However, after confirmation that the ((A)) wave is over, then a ((B)) wave down could retrace to back-test the upper descending diagonal trend line. And then there should be a ((C)) wave upward for minute ((ii)).
A 62% retrace or more would not be unreasonable for a diagonal wave. Could it be less? Yes. Could it be more? Yes.
First, we must recognize that the Payroll Employment report is out before the open tomorrow and that could involve quite a lot of volatility. Second, we must recognize that the potential ((B)) wave down could be "any three", including a zigzag or multiple zigzag, a FLAT, or a triangle. There is just no telling how it will occur, if it does.
Again, the above scenario is the "most likely" - but there are others. We'll do our best to navigate the uncertain future.
For now, have a good start to your evening.
TraderJoe
I've read leading diagonals have deep retracements, so I'm expecting 61.8 maybe even 78.
ReplyDeleteok by me.
Deletethaks joe
ReplyDeletei expect retracement to fill gap below then reverse as a starting point..
that implies 2806 (61.5%) for this current wave high
or 2770 (50%) for this current wave high
then i expect c wave to be unexciting but rather long over several weeks at least
welcome, Marc.
DeleteJoe,
ReplyDeleteIs it my imagination that we currently have the clearest view of the future action that we've had in awhile? It scares me!
Based on degree labeling requirements, it seems pretty clear. Second to it was the Minor 4 triangle and new high for Minor 5 - which comes in about second. In my view, a triangle had to come before the last wave up.
DeleteCan this abc can be just an A wave of a larger ABC which takes us into 2019 to finish off wave 2?
ReplyDeleteYour expectations?
Thanks!
Why thinking so far in advance? Let's see if we get the first a-b-c up.
DeleteSo I can stop trading through the holidays and focus on life =)
DeleteWave Bs, 2s, and 4s, are not fun anyway.
On a separate note, early in October you provided us with some quick counts of gold. I wasn't able to follow as the price points on my GC futures charts didn't match. I hit a dead end. In any case, since it's probable that we've struck 'the top' in equities, I'm even more anxious to take a look at alternative asset classes for muti year, multi decade setups.
How can we have you provide your indepth point of view on the bonds, miners, and gld/slv counts?
And lastly, do you know Avi Gilburt?
Best regards,
-TJ
1. Hmm, why you and not me (lol!)
Delete2. I always count gold futures.
3. Not too interested in those (bonds, miners)
4. No.
Joe, I am a new follower of your excellent blog. But I find it difficult to understand the degree of waves. Is there any legend of labeling symbols?
ReplyDeleteThnks,
AntaTrader
Hi - glad you are following. While working "intraday" like in the above charts, time is of the essence and I often just use 'relative' wave labels so that they can clearly be seen by readers. The degrees relate properly to each other, but they are not the final correct degree. Further, both in text and in a different charting program I use, it is impossible to draw the correct Elliott Wave degree labels with circles around them - not the program above, a different one.
DeleteThat's why I stated in the 'Market Outlook', the correct overall degree of minute i down, the text symbol for which is ((i)) which gets very, very, messy on charts, or the correct Elliott wave symbol is circle-i.
In longer term charts I will clear this up on the charts. For now, it was the pattern and internal count that was important on the hourly chart. And now that the five waves down are finished, I hope you can accept it when I say they are minute ((i)), down. In the Chart School at Stockcharts.com are the text versions of the Elliott degree labels, and I see no need to change from those or reproduce them here. A link is here, copy and paste to your browser if needed.
https://stockcharts.com/school/doku.php?id=chart_school:market_analysis:identifying_elliott_wave_patterns
Joe, I forgot to say thank you. Your explanation is very practical and intelligent.
DeleteJoe, thanks again for your excellent analysis. IMO you should have your own website with subscription service. I think you would have a lot of subscribers. Thanks again. Sam
ReplyDeleteech .. it just adds to the overhead (including subscriber management, new income taxes, etc.) or as Bill Williams might say, "it's too much like a real job." And again, my purpose is to educate on how to 'properly' count the Elliott wave so that people can learn to do this for themselves.
DeleteUnderstood. Bottom line is you do great job and everyone on here appreciates your efforts to teach us. Thanks
DeleteIf wave (1) and wave (5) of ((A)) are equal in length, then prices can reach 2777.
ReplyDeleteAs of 11:00 AM this morning, S&P500 cash and ES futures had five 'countable' waves down. Still not below 2,704 futures, though.
ReplyDeleteES Futures below 2,704 at 12:55 ET. Down trend confirmation occurred.
DeleteCan we expect 50 % retracement from 2700?
DeleteYes, that's possible.
DeleteRemember, a triangle B wave is possible; so is a multiple zigzag. B waves can be "any three".
Delete