Market Indexes: Major U.S. Equity Indexes closed uniformly higher
SPX Candle: Higher High, Higher Low, Higher Close - Trend Candle
FED Posture: Quantitative Tightening (QT)
In our Thanksgiving Day post of 11/22, recapping the prior day, we said that acceleration would soon be needed for minuet wave (iii) to get underway. Acceleration lower is not what occurred today. In fact, in the latter part of the afternoon we posted that an impulse up had occurred. And that impulse upward also created upward overlaps which are difficult to reconcile as part of a downward impulse. As a result (i), (ii), (iii) in the downward direction now becomes (a), (b), (c) in the downward direction. And today's impulsive up move could be all or part of an X wave.
Here is the S&P500 Cash Index - Hourly Chart. The arrow at the top means we may soon be moving the black minute ((ii)) wave, circle-ii much further to the right.
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| S&P500 Cash Index - Hourly - No Acceleration Lower |
The issue is this. The upward wave since 20 Nov, already has more bars in it than the flat (b) wave, formerly wave (ii), had in it. Therefore, since it has more bars and overlaps the downward b wave (as shown on the chart above), it is very, very likely a wave of a higher degree; like an X wave.
Again, this wave count is by measurement only. Not by guessing. Further, the degrees of the wave structure would no longer fit a continued downward third wave. Lastly, the downward structure again forms a 'perfect' channel. So, we must allow the possibility that a multiple zigzag downward is forming. The objective of that wave structure would be to reach the 90% or better level needed for the Flat (as per the FlatLander's post).
In the short run, this means there could be more poor momentum downward wave structure. In the medium term it means the 2,815 level could be revisited. We will take it wave-by-wave until the structure becomes more clear to all.
Have a very good start to your evening and to your week.
TraderJoe
If we look at the NYA (which you could argue is more accurate representation of US markets and better for wave counting), the drop started on around Sept 20 and then there was a bounce and the SPX made a higher high before falling in October, going by NYA that was a wave 1 and October's drop was a wave 3, and we are currently in a wave 5, and we should either make a double bottom or slightly lower low, before we start the actual wave 2. Just some thoughts.
ReplyDeleteEach index needs to be counted separately. There is another very famous web-site that said (paraphrase) the "uptrend will not be over until ALL of the DJIA, NDX, SPX, RUT, and NYA had made new all time highs." Wrong. The SPX is better for counting the SPX, the NYA is better for counting the NYA and the RUT is better for counting the RUT.
DeleteSorry, the SPX didn't make another high but was close to it, so the same count could be applied to it.
DeleteNo. Because as I showed in a post, it creates violations of the meaning of the term 'degree' if it is counted that way. The next wave down is 'too large' to be a sub-wave.
Deletethanks
Deletejoe thanks. I understand your count and given lack of acceleration it seems like best primary count. . I think there is also a 1212 count which works. circle a becomes 1 but has to be moved down 1 low. circle b would be 2. then i believe fridays low could be 1 and todays high could be 2. I dont know for sure if there is an impulse using the subsequent low from circle A in forming a new wave 1 but if so it would then allow for the wave degrees to hold for subsequent wave 1. I know the wave degrees for waves 2 are good.
ReplyDeleteSo the current Minute((ii)) would become minuette(a) and the current down move when complete will become minuette(b)and the degree of all the internal components would be reduced accordingly?
ReplyDeleteYes.
DeleteGreat post! Santa Claus rally after all?
ReplyDeleteThanks. Possible.
DeleteSee post below.
ReplyDeleteVery interesting see in live the metamorphosis of the waves that seem a thing and finish being one other thing. I see a nice intraday wolfe that invite to think in a new lows tomorrow. For the moment the big flat takes leadership role. Thank you Joe !
ReplyDeleteWelcome 6Q.
DeleteOf course my stop was hit today. Need a move higher before I short again.
ReplyDeleteThank you for the post Joe. Hope you had a good Thanksgiving!
ReplyDeleteWelcome Bill. You too!
DeleteJoe,
ReplyDeleteTrying to keep my degrees straight. Should there be a w underneath the red(c)
..there you go.
DeleteI did notice this potential W2 became longer in time than previous (2). I am not sure I fully understand the b wave overlap. What guideline did this break? Where can I read more?
ReplyDeletePaul, what I interpret is that if SP confirms this abc-x-abc, the previous ((2)) switches place (as Joe has drawn in todays chart) and all will be a long ((2)) in time as a big flat, that already was proposed as a possibility days ago, if it reach al least the 90% of A.
DeleteThen ((1))-((2)) 1-2 it would happen to being ((1)) and A-B-C to ((2)). So a nice C of ((2)) could be the supposed Xmas rally.
Hope this helps.
So, if the red (a) was (i), and the red (b) was (ii), and the red (c) was (iii), and the X wave was (iv), then it breaks the 'guideline' that no part of wave (iv) should encroach on wave (ii) territory. It would have shown a loss of momentum which is not characteristic in impulse waves.
DeleteThanks for saying Scipio. Keep it up, yourself, as well.
ReplyDeleteDoes anyone know what the 2:30 AM spike in the futures was all about?
ReplyDeleteA fake news from china on commercial agreement with USA. ...Market manipulation.
DeleteYep, ok, got it.
ReplyDeleteIn a bear market (and we are currently assuming the market has topped), I would normally prioritize the counts to assume the 3rd wave is the extended wave and since that potential previous (iii) was approximate size of (i) - I would normally default to either (v) was going to extend (invalidated by the overlap) or that previous (iii - iv) was the 1-2 of (iii). The bull count (if you wanted to call it that) would be a B wave count with a large C back up for ((2)). Am I not thinking about the ranking of the potential counts correctly?
Got it. The second 1-2 would be larger than the first - thus is also violates the degree principal. (I am still getting used to this)
DeleteOk, so far. Keep it up.
DeleteAs of ~11 AM EST Two more marginal highs today; could be a contracting diagonal under construction.
ReplyDeleteYou're thinking potential 'a' of ((X)), maybe gets SPX to trendline?
DeleteKO .. yes
DeleteThe diagonal has boundaries of 0 = 2,653; then 2674, 55, 76, 64, 79, with wave four of the diagonal at 64. Price has now traded below the low of 64. If it's a true diagonal, it should trade below the low of the diagonal in less time than it took to build the diagonal.
DeleteThank you for the exact measurements and time information. That's really helpful.
Deletethat would be trading below 53 by a bit past open tomorrow on cash if im looking at this right - agree?
DeleteNew potential diagonal has a higher high, and somewhat wider parameters. 55 still the wave two low; 63 is the wave four low. Need confirmation that fifth wave is over.
DeleteMarc .. just bought itself a bit more time.
Deletei can also see leading diagonal as 1 off last week lows to 75 this AM, then b wave high to 79, with first 64 today as 2 with no degree violations in case you are in search of alternate if we extend.
ReplyDelete'Max' for the fifth wave of a potential diagonal is 2,687 by measurement.
ReplyDeletethanks joe. not by measurement i have resistance at 84 and that should keep it inside some trendlines.
ReplyDeleteRUT has not made new highs today; though SPX has. Interesting.
ReplyDeleteOverlap on wave (i) again of the potential diagonal.
ReplyDelete