Market Indexes: Major U.S. Equity Indexes closed uniformly lower
SPX Candle: Lower High, Lower Low, Lower Close - Trend Candle
FED Posture: Quantitative Tightening (QT)
Yesterday's chart was predictive of today's down move. That is the very purpose behind the exercise of Elliott Wave counting. Sometimes it is predictive - other times like when in the midst of corrections it is less so. With that in mind, let's again display the ES 2-hour chart.
 |
| ES E-Mini S&P500 - 2 Hours - Channel |
So far, the channel is working well to constrain prices. But, even though there was a substantial decrease in prices, you can see for yourself the down bars do not have the individual impulsivity of the initial bars lower.
So, a lot will be dependent on the gap direction on Monday, and any subsequent follow-through. If the gap is lower with lower follow-through, then it becomes possible we are in sub-minuet i of minuet (iii), lower.
But, if there is a small gap down and reversal, and prices climb up over the declining trend line, we must allow that today's down movement is only a three-wave b wave. With a c:5 wave up yet to follow. The purpose of such a wave would be to make minuet (ii) longer in time than minuet (i). That is common, and it would be OK with me if that occurs.
The market, as measured by the S&P500 cash index came within 0.10 of that 90% level downward. That should be close enough for all intents-and-purposes, but it could also make the 90% level on Monday.
In this kind of environment, it helps not to be too dogmatic or to have too many expectations. In that light, we need to let the market speak here in the short run. So patience, flexibility and calm remain the by-words of the time.
Have a good start to your evening and to your weekend!
TraderJoe
Hi TJ, Thanks for the update. I'm sure you read the STU. They have shown internal counts relating to the wave down from y (2690) but didn't show internals for today's down move. I used AAPL as a guide and I thought I'd share my count - It's worked pretty well so far and I traded it & the index based on the count shown https://imgur.com/a/J5uKF1V
ReplyDeleteLooked like a clear 4th wave triangle and now has come back to test my lovely trendline to "possibly" complete 5. If this is right then it correlates with EWI count on the SPX futures shown in the STU.
Please do not make assumptions about me. I have never subcribed to STU. I subscribe to the monthly only so I can see when they violate their own rules in a 'big way'.
DeleteWill not make assumptions again. If I may ask, is there a reason you have not shown the internal count from Y(ii)?
DeleteCan be counted as most of a 'three' or part of a 'five'. Depends if the wave ended today - which is not always a good assumption.
Deletejoe have great weekend thanks for all you are doing
ReplyDeleteWelcome Marc. U2.
DeleteJoe, I have a question on what is the max in time wave 2 can be compared to wave 1. say we ipo at 20. run to 30. this is wave 1. this took 50 candles. now in wxyxz. this is the lengthiest sequence, I believe. w could be no more than 50 candles, correct? the first x would be capped again at 50. y at 50. x at 50. z at 50. this gives 250 added up. therefore, do I have it right that wave 2 can not be 5x wave 1 in time or it violates degree?
ReplyDeleteshould read greater than 250
DeleteHuh? Can X1 be as long in time as W? Can X2 be as long in time as Y?
DeleteWXYXZ are of the same degree so I am going to answer yes to both your questions. x1 can be as long in time as w. x2 can be as long in time as y.
Deletemy question is what is the max length in time wave 2 can be compared to wave 1 and they be of the same degree.
Go to Barchart.com, select "technical chart" from the side border, and enter the symbol GC*0, with a date range of 01/01/1999 to 12/31/2001. Examine the wave 1, and wave 2 in GOLD, and count the up candles and the downward candles. Is your theory correct? This was the 'kick off' to the great GOLD bull market.
DeleteUse a setting of 'weekly nearest' for the candles.
Deleteso a time constraint does not exist?
DeleteOh, yes it does.
Delete0 to 1 is 8 bars, while 1 to 2 is 78. 9.7500 is that ratio. wxyxz is 5 waves. whatever you know, joe, I can't think of at the moment.
DeleteAgreed. One thing I would add for possible perspective is that while SPX moved below its X bottom, VXX did not move above its comparable peak. A nice non confirmation at this juncture.
ReplyDeleteAdditional note: Basis SPX (30 min), I felt there was an abc down from your "Y". This AB x 1.272 = CD measure actually gave me a target for possible bounce/reversal. This was where the day's low came in and held (so far). I lean towards your "b" leg thought (based upon what we've seen so far). Thanks again!
DeleteYes. We came up with the same 1.27 measure. But it's meaning is still open for discussion.
Deletetacharts - Your comment regarding VXX still below it's prior peak also coincides with SVXY testing it's Dec 7th low (which took out it's prior lows by a notable amount) and is often a sign for a pending reversal.
DeleteJust received an e-mail solicitation from Neely stating that his work indicates a big rally in the S&P beginning soon and lasting well into the new year. He doesn't see the end of the current bull market until sometime in 2019.
ReplyDeletestevela - couldnt edit so had to delete and start over. :o) Is this based upon his neutral/expanding triangle? If so, can you post a chart of it, or list the following: beginning of a, a,b,c,d ? Thanks!
DeleteJoe,
ReplyDeleteI wanted to take an opportunity to discuss/question some of the things Neely said in his interview.
1. He indicates he hasn't been able to do a daily, weekly, or monthly count on the SPX in years and even a six month count isn't really that good. This raises a red flag, at least for me, about the efficacy of his rules.
2. The more I think about it the more curious his rule on time consumption becomes. In his degree concept he states that in both time and price a lower degree wave should not exceed the value of a larger degree wave. This is very logical. His time consumption rule is not. He states that a corrective wave is supposed to cover less ground in price but more ground in time. As I look at a weekly chart of primary 5, Int 2 took less time Int 1, and Int 4 took less time than Int 3. If one looks within each Int wave one will find for the most part the same scenario with minor wave corrections. I'm not saying a corrective wave should by definition take less time but it makes more sense. If you are in a trending move such as an impulse doesn't that by definition mean you are consuming more time in the direction of the trend. I suspect that in reality there is not any mandatory time relationship between motive and corrective waves. I'm just having a hard time believing what he is saying.
I'm not trying to ruffle feathers here. It's just that my lyin eyes are telling me something different than his rule states.
joe can answer, but he ends up using corrections that dont use highs and lows as terminal prices in order to extend the time... thats my opinin... i have thought about it as well
ReplyDeleteMarc,
DeleteThanks for the Comment. In EWT not all corrections use the high or low point. The correct procedure is to use the value of the end point of the correction. In a zigzag the end point and the max point in price are the same. In a triangle one measures to the end point of e whivh is not the extreme of the ground covered. The same is true for running flats. I hope this clarifies that point for you.
Keep in mind that it was Elliott, himself. who used to use the terms "orthodox end of the move", and "nominal end of the move". In recent years, one has not heard EWI use these terms - although they were used in the Elliott Wave Principle. Inquiring minds want to know why.
Deleteyes he will end up with more running flats thats a way to extend wave 2. he also has corrective patterns that take uo more time and include bith local highs and lows. my point is ewt needs to be tweaked to enforce his rules.
ReplyDeleteJoe, do you have any count that supports a low being made around 2530-2570 in the next few weeks and then a large rally extending out to April bringing us to 2900+?
ReplyDeleteI'm not Joe, but I'm thinking along the same lines. From the all time top, could the decline be morphing into a diagonal? Whether an LD or ED, the implication would be for a substantial rally from that low.
DeleteNo.
DeleteThanks Joe.
ReplyDeleteRoy I am bullish threw March if those lows are hit. Very risky though as a failure could lead to a substantial decline into 2100 region
ReplyDelete