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, we counted five waves down to a ((5)) = ((1)). That is not what's changing. Today, there was a brief three waves up, that crossed up over the upper channel down trend line, from the fifteen minute chart, shown yesterday, and then lower lows that did not, as yet, fill a gap on the hourly S&P500 chart shown below. From a time standpoint, that three waves up early this morning was simply too brief to be a whole correction. So, we called it an a wave up. Then there a down wave that appeared as a "three" which we called a b wave. Without filling the hourly gap, the market sported quite the rally, upwardly overlapped wave (i) down, again, and then gave a bunch of it back in the last hour.
Not to worry, we again advised readers on line and commenters, not to begin upward wave counts until or unless the prior wave ((4)) high was exceeded. It wasn't.
The problem was this: the lower lows of today, even if they are the lower b wave of a FLAT for a minuet second wave have bearish implications. I don't want them too. That's how they work.
Further today I was able to find a 38% Fibonacci ratio, in time, to the prior up wave sequence, that I counted as ((A)), ((B)), ((C)), up, for you in near real time, which makes it just long enough for the minute ((ii)) wave in terms of time. The lower lows for today ruled out many of the possible patterns that could have been considered yesterday. So, if you look along the top of the chart, you will see a timeline which provides 38.2% to the high, versus the length of the previous entire minute ((i)) diagonal down.
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| S&P500 Cash Index - Hourly - Minute ((ii)) Confirmation |
Because the up wave as minute ((ii)) is 38.2% as long as the diagonal (see the 38.2% flag at the upper right), and because it made a near exact 62% retracement, it can be a valid second wave. We have fallen well out of the up channel for minute ((ii)), the minuet (b) wave of minute ((ii)) is broken lower, AND the EWO is currently making new hourly lows.
That likely means that after minuet (ii) completes upward, if it does, that a strong minuet wave (iii) will occur downwards. The target for minuet (ii) would be the prior wave iv. Again, there is no upward counting unless today's a wave high is exceeded.
Today, the only difference in the hourly chart above is I have changed the degree labels from what I used when working quickly to their actual Elliott Wave degrees as best I can tell at this point. Overall, I would expect the five minute waves ((i)) through ((v)) to add up to a Minor 1, or Minor A that will break the February and April, 2018 lows in the S&P500 and the Dow.
I know a lot of people were asking why the October low 'couldn't have just been the C wave of a running flat fourth wave'. This is more evidence why. It certainly doesn't have the beginnings of a look of 'five waves up'. Just the opposite. So, I hope the explanation I provided earlier at this LINK made sense to you.
Be careful out there, and have a good evening.
TraderJoe
If this is a stupid question, my apology! Based upon your larger labeling to date, we appear to be in ii of larger iii if Im correct. This implies you see us making a 5 wave move down. As this entire move is "corrective" if Im thinking correctly, then when completed, this would all be a larger A wave, with B and C to follow? Thanks for your indulgence. :o)
ReplyDeleteI added this sentence to help clarify, "Overall, I would expect the five minute waves ((i)) through ((v)) to add up to a Minor 1, or Minor A that will break the February and April, 2018 lows in the S&P500 and the Dow."
DeleteThanks. Thats a relatively deep initial wave A it would seem. Let's hope its A of a flat or symmetrical triangle!
DeleteReminder: Five waves down is never all of a triangle leg.
DeleteMy error. Triangles are indeed 3 wave legs. But I'd still settle for that flat, lol.
DeleteOne other question. Is it possible that today's opening rally was actually the "c" leg of iv, with the ensuing nicely defined 5 wave move down v? This channels much nicer, and still shows divergence on EWO as expected. iv would have been a flat under this scenario. Thanks again.
ReplyDeleteNo, because wave ((2)) was that FLAT, remember? Then there would be no alternation in the wave. Also, then 5 = 1.618 x 1 which is not a very common Fibonacci ratio for fifth waves.
Deletesweet my get to see my structure i asked you about earlier play out as ((iii)) off 2815 top
ReplyDeletethanks joe. no surprise. why looking for 5 down from all time high we in wave 3... versus... impulse down from November high to complete ABC off all time high. does it even matter?
ReplyDeleteMarc.. I have read your question three times, but still don't understand it. Please take some time to clarify it.
Deletesorry. I assume we finish a large move off all time high. we already have a wave down and a wave up. does it matter for now if we expect abc or 12345 given we have ab or 12 already.
Deletecircle 3 and circle 5 will have to be longer than red 1 to preserve wave degrees?
DeleteFor now, it doesn't matter. It will become more important later.
DeleteI just don't see that we are in wave 3. I think we just completed or almost completed B of minute wave ii and should see the C wave up soon. It looks to me like an expanded flat. The move from Nov 2nd to 7th doesn't look like 5 waves, it looks more like a b wave of the expanded flat
ReplyDeleteMy view also. Santa Rally for ((C)) wave to finish the year
DeleteI can only say you are going by 'looks'. I am trying to go by measurements.
DeleteJoe, thank you so much for steadfastly sticking to measurements. I know that's how you do it, but I'm glad that you reiterate it. It helps me stay on track. Please continue to reiterate it. I for one, need the repetition.
DeleteWaves 1 or 3 do not look like they extended in this recent decline. This would increase the odds that the 5th wave extends - right?
ReplyDeleteNo. In the 15-minute chart wave 3 is less than 1, so 5 must be less than 3. Are you actually 'measuring' or just 'looking'? Just asking ..
DeleteTrying to - perhaps I was measuring the wrong degree. Will look again. thx
DeleteI cannot even imagine the time and effort you put into charting / trading (for yourself) and then help others on their EWT journey. Thanks
DeleteJoe,
ReplyDeleteRe-reading post on degree protocol. I have a grasp of a sub-wave not allowed to be larger than the prior wave in the same direction but wondering if there is any comparison between waves in opposite directions? I'm asking this in the context of the current degree choice of minute off of the top. Intuition would lead one to examine the fact that minor 4 down of the last impulse was 319 points and currently minute 1 down is 336 points. I realize this measurement proves nothing other than a smaller degree wave in one direction is larger than a larger degree wave in another direction. I'm just trying to get a feel for how degree is chosen for a new series of waves when direction changes.
How many months did Minor 1 take from the bottom in Feb 2016, to Aug of 2016? And how many months has this decline been from October 1 to Nov 15? Do you see my point? Minute waves now, to a Minor wave later.
DeleteI do see your point. Had not considered time. Thank you.
DeleteJoe, c in this (ii) is not required to go over the top of a, correct? it could come to terminate below 2746.80.
ReplyDeletehowever, there is the gap at 2781.01 and i think it is allowed to fill if my math is correct.
because ((ii)) - (i) + b would be 2785.92
(2815.15 - 2714.98) + 2685.75 = 2785.92
I think more likely the market won't let it fill and we go down prior to it like you have it drawn.
Interesting!
DeleteTim, post some of those trade ideas on trading view :)
Deletewe may be in (iii) already wow ..
DeleteThere's a new lower low this morning. Can still be part of a b wave, down. No upward wave counting until over the prior a wave.
ReplyDeleteb not far from 2.618 of a, that would be an extremly long b wave?!
DeleteAlready 20 points off the low. There is a futures declining trend line from 2749, through 2710 on a 15-min chart. If it can be busted upward and back-tested we may be on to something.
DeleteDescending 15-minute futures trend line just touched at 2,702 futures. Let's see how it goes.
DeleteIf the b wave down in the 15-minute futures, counted as w-x-y, with x as a longer overnight triangle, then price is now up and over the (e) wave of that x wave triangle.
DeleteOn a 1 minute chart the move up off of the low channels well as an impulse but not enough bars to evaluate EWO.
ReplyDeletewhat was the news at 12:09 spx is like a rocket
ReplyDeleteyes, that's the point ..
DeleteSoothing words from various FOMC officials earlier today. Bostic saying Fed not too far from neutral rates. Implies fewer rate increases going forward. Keep in mind this is a minority of Fed members.
DeleteCash just upwardly broke through the 15:00 EST fractal from yesterday.
ReplyDeleteNow at 2,735, the second up wave is more than 100% x a first wave up. That means if we are in a sub-wave i of a third wave (or a C wave), then the first sub-wave ended at 2,725 (because 100% would have been 2,730), and the two bumps up may be the b wave of a flat for a second sub-wave down. I only mention it because it might be a bit of a down draft.
DeleteThe EWO on the five-minute chart, is green, rising and the highest level of the day.
DeleteIf there is a sub-wave second wave down, it 'must' remain shorter than 18 points, which is the length of the first down wave from noon to 13:00 EST.
DeleteDown she goes 2,735 to 2,716 right on schedule! And making the beginnings of a very nice FLAT wave. This is the true power of degree labeling in real time. Remember, the 18 points for a FLAT is the 'net' distance traveled.
DeleteFrom where we should count this points? From 5 or from the top (in case there is a b higher from a flat)
DeleteThank you, and nice call !
Thx, and pls see previous entry above.
DeleteLol, you post it while I was writing. Thank you again.
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Deletebrilliant. but didnt quite pan out. now time of wave coming into play and limiting counts up
ReplyDeletestill possible 12 12 12 ....
Delete46, 66, 86 approx wave 3 targets if this case
DeleteWhat didn't pan out? Please try not to leave cryptic posts .. it burns my time. Please take your time to contribute.
Deleteunderstood. i can and will do better.
DeleteSeeing triangle in 4th wave position off of the 2735 top. May have 1 more up thrust to complete c of flat
ReplyDeleteTriangle? what are your terminals in round figures?
DeleteP.S. Having a FLAT wave in today's up move most likely rules out a diagonal. Should see an impulse up; but maybe sub-wave five of c of (ii) will be a diagonal.
ReplyDeletewith the position of the triangle so close to the top I'm guessing an expanded flat that exceeds 2754 into the 2759 area.
DeleteSpeculating a gap up in the morning that runs for awhile and then reverses.
Deletelooks like we are starting 5 up already
DeleteIf you're counting a third wave up - mid-day - then it is 'shorter' that the first wave. And that would limit travel after the flat to 2,746. But I don't see it that way, as I don't see a triangle.
Delete5 of c diagonal looking promising with this pull back after exiting triangle.
DeleteNo triangle. No thrust up out of triangle, no fifth wave today. All I see are waves of decreasing degree. It would be 'most' common for a third wave to make 1.618. We aren't close yet.
DeleteI'm counting a triangle on a 1 min chart from 2:32 to 3:47
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ReplyDelete