Market Indexes: Major U.S. Equity Indexes closed higher; DJUtil lower
SPX Candle: Higher High, Higher Low, Higher Close - Yin-Yang Candle
FED Posture: Quantitative Tightening (QT)
If you have been following our blog, you know that we have counted wave minuet (i), down, and are trying to count minuet (ii),
up. Based on the position of the Elliott Wave Oscillator on the fifteen
minute chart, this is the best count at this time. However, risks of an
incorrect count are exceptionally high in this wave. Anything could
happen - including a government shut down. Therefore, we are posting the
current count, and showing the best alternate in red.
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| S&P500 Cash Index - 15 Minute Chart - Potential Ending Diagonal |
Today, we noted that the potential wave ((3)) has a lower high on the Elliott Wave Oscillator (EWO) and has made only a marginal new high. But still, it was a high enough high to suggest an uptrend. Prices broke down to the nearest 15-minute candle at wave ((3)), with it being approximately as long as wave ((1)).
And if wave ((4)) is in place, or nearly so, then it is shorter in price and time than wave ((2)). A Fibonacci ruler shows that if ((5)) is just less than ((3)), it can crest over wave a, and avoid a truncation. Avoiding a truncation does not have to happen. The upward wave can fail, and must be allowed to fail.
And if wave ((4)) is in place, or nearly so, then it is shorter in price and time than wave ((2)). A Fibonacci ruler shows that if ((5)) is just less than ((3)), it can crest over wave a, and avoid a truncation. Avoiding a truncation does not have to happen. The upward wave can fail, and must be allowed to fail.
Only because of the near equality in time between waves ((3)), and ((1)), and the fact that we are not yet out to the apex of a wedge, we are showing the alternate that wave ((1)) may have crested at today's high, with the other prior waves as just a zigzag of the new first wave. They are a little ambiguous. If wave ((1)) only occurred today, then a lower low would likely drive the EWO lower. So far, it has held well - near zero - for the diagonal signature in the main count. Also, there did appear to be a running triangle as wave B in today's wave ((4)), and that make have put the brakes on that wave.
And that remains why patience, calm and flexibility remain the by-words.
Have a good start to your evening.
TraderJoe
We should now if high today was 3 or the red 1 you provide by futures. they need to "time out" in the coming hours. I have it at 18:00 Chicago time. I am looking at 15 min chart. just now nice green candle.
ReplyDeleteneed a lower low to time out
Deletewave 4 needs to take less in time and price than wave 2.
Deletehere is chart.
https://invst.ly/9i6hy
Joe,
ReplyDeleteI don't know if this has been considered but it occurred to me today.
Is it possible that y ended minute ((2)) and that minute ((3)) began and minuette (i) down of ((3))is a leading diagonal? That would put submin i down @ the 2583 low and submin ii up at today's high. The entire minuette (i) diagonal would have to end above 2340 to avoid a degree violation. The up move that ended today was just short of a 50% retrace and I'm not sure what the retrace requirements are for a diagonal.
Correction : diagonal would have to end above 2440
Delete.. plausible, but diagonal often have greater than 50% retraces.
DeleteYes, I thought so. That's what was troubling me.
DeleteThanks!
Thank you.
ReplyDeleteWelcome.
DeleteThis is my count on the RUT - has helped me (so far) with trading, along with AAPL
ReplyDelete10th DEC - https://imgur.com/a/zLkuxrQ
12TH DEC - https://imgur.com/a/0h0QXcg
I love all these comments being posted here. Reminds me of the old chat room only better because I can keep coming back and reviewing the tidbits of knowledge that are posted.
ReplyDeleteQuestion to all: why would the US government shutdown be good for financial markets?
ReplyDeleteI am learning a lot from all of you. Thank you
DeleteStop listening to the news, its irrelevant to trading. Trade what you see, not what you think.
ReplyDeleteThere is a major shortcoming of the "news-driven" market approach: First, you must wait for something to happen -- and only then react.
EW analysis, on the other hand, allows you to make probability-based forecasts without relying on the news. Please do your own HWK.
Media is toxic - agreed!
ReplyDeleteJoe, early today I showed a chart in the previous blog post that had A in a contracting diagonal after (3) as a flat. That is incorrect count, correct? By rule only B in a contracting can be a flat. It was at 1:28 PM.
ReplyDeleteThis would give the (4) a 3-3-5 structure. It needs 3-3-3.
yes, the chart at 1:28 pm was incorrect.
DeleteGood morning Joe,
ReplyDeleteIs their any way to produce a target from a triangle breakout. I know they are termination patterns but is their a way to possibly judge how far that move will go and potentially find support/resistance. I have heard its typically the same length of 0 to A of the triangle as E to target?
Draw the trend lines back to the origin of the pattern. In a strong market the target is "the widest width of the pattern, added to the breakout point".
DeleteThank you!
DeleteI think red 1 is the count, Joe. Futures look a little telling.
ReplyDeleteThe alternate is confusing me. That is showing we have a red 1 up and therefor would be in red 2 here and still need a red 3 an 5 higher? Doesn't momentum feel pretty weak for that
ReplyDelete4th wave should be ending by 11.05 am EST after that it will take more time than wave 2.
ReplyDeleteAlso wave 5 should remain shorter then wave 3. It can go as long as 2714 and still remain shorter.
DeleteHowever once wave 3 high is taken out, it might fail anytime as minimum requirement for diagonal will be fullfilled.
EDT we need new low after 1105 to get us to alternate
ReplyDeletebelow yesterday low
DeleteThere u go Mark new low.
DeleteI missed ur point on alternate. What does last wave has to alternate with ?
Deletestill a 4th wave unless we take out todays low after 1105.
Deleteit owuld mean we are in 2 down see joes chart
Got u, thnx.
DeleteLooks like we are going down for at least red ((2)).
ReplyDeletei think your initial read is alive unless we break low...thanks joe...
Deletei have abc for W2 with b triangle. putting us in W3 (with a new low)
Deletenot W2 on your chart - higher degree done - not in an upward diagonal
DeleteI guess this way we could rally into fed decision on Wednesday. 3 -4 the indecision leading up. then sharp sell off?
ReplyDeleteGood morning Joe,
ReplyDeleteWould a 50% retracement of red 1 at 2634 be a potential target for red 2?
Is there a way to differentiate between (4) of diagonal vs ((ii)) of alternate bigger diagonal if (2) is not taken out.
ReplyDelete0 to red 1 38 retrace off the top on futures being attacked for 3rd time now. joe, why not expanding diagonal off low? 2 would have went between 50 and 61.8.
ReplyDeleteI checked my notes. 3 has to be greater than 1 in ED. 38.2 just coincidental.
DeleteHas anybody else counted ABC down to finish Red 2?
ReplyDeleteIF we go beyond 78% lower, then this would be the 'failure' count, as best as I can tell. There is not a lot of evidence for it yet as we are missing a wave three gap.
ReplyDeletehttps://invst.ly/9ii-1
Joe, when you get time I am curious your thoughts what made you think we be getting the contracting diagonal and 5 waves for a flat and not the wxy 3-3-3? is it that 3-3-5 is more common?
Deletethanks joe
DeleteFirst, I said, "IF", second, down move from the high was corrected less than 50%. That's ok, but a little less common.
DeleteI understand I am just trying to understand how best to map out a future path. Why you choose 3-3-5?
DeleteIs possible a triangle from (i) and now in d? or c is too long in time ?
DeleteGerald - I already said, because the up move was corrected less than 50%, and there was no gap down. This is the last response on this topic. Both are ok (3-3-5, and 3-3-3). Corrections always try to muck up things. That's the way they are.
Delete6Q. No, it would not be a triangle from (i). Only a possible y wave triangle for part of (ii). That is still possible. Last comment on this topic of a triangle from (i).
DeleteThank you
DeleteSorry, I forgot you told this yesterday.
DeleteRUT acting nicely so far - impulsive looking decline from yesterdays high - let's see what type of bounce we get #doyourownresearch
ReplyDelete13th Dec - https://imgur.com/a/tPTFwhY
Prev...
10th DEC - https://imgur.com/a/zLkuxrQ
12TH DEC - https://imgur.com/a/0h0QXcg
We are now back over the unchanged level on futures; possible we had a diagonal down. Can be counted that way. Is it ending or leading is the question. Very difficult to tell.
ReplyDeletePrevious bars exceptionally choppy. Potential diagonal on the 5-min, below. Question is, is it leading or ending?
Deletehttps://invst.ly/9ijlt
SPX 2 OPTIONS (just my counts)
DeleteLeading diag - https://imgur.com/a/uFAOsAP
ABC - https://imgur.com/a/WVxkOGO
Glad im thinking along the lines of the GURU
DeleteBeing 'longer in time' than the Dec 11 move down, we 'know' that the degree of the waves has changed. Nothing has yet ruled out red ((2)). But, we'd need to see a higher high day for that.
DeleteLooks more like a leading diag on NDX??
Deletehttps://imgur.com/a/HEJVBBZ
Would it not be a degree violation if potential (i) of C of flat is bigger than all of A?
ReplyDeleteEven the subwave of (i) of C is bigger than A
DeleteFor the bigger diagonal
DeleteSame for Y as triangle, subwave of (a) of triangle bigger than all of W
DeleteYes! I think that is the key point. Very, very good Erik!
DeleteThat changes things!
DeleteThanks! Let’s see if the degree reasoning can prove itself
Deletetry this
Deletehttps://imgur.com/hVnOzUo
Marc , nope (a) can't be longer than ((a)); give me a sec.
Deleteyou are thinking hard now i like that
DeleteThis is the only way I see to explain the degrees now. It's ugly but it DOES work, and it makes the diagonal a 'leading' diagonal, most likely.
ReplyDeletehttps://invst.ly/9ikhm
Good job, Erik B.! Even though I 'hate' the pattern, I have to accept it.
Deletethanks. i was waiting for example to clarify that the "time" constraints are guidelines and not rules. (ii) shorter than (i). opening up a whole can of worms moving the (1). now (2) may not be finished.
DeleteThat looks quite similar to my RUT count..hmmmm
DeleteNot following. (ii) and (i) are of the 'same degree' in your comment.
Deletethat count is next to "game over" when I open dictionary.
DeleteET, I think i might have pointed out expanding diagonal to you on "December 10, 2018 at 11:46 AM".
DeleteBut it was rejected due to less retrace for wave 2.
neelys rule that wave 2 is longer than wave 1 same degree
ReplyDeletemaybe that where all the confusion stems from - i couldnt tell if you are adhering to that "rule".
ReplyDeleteNo, he is correct; "in certain circumstances only". I have found his errors.
Deletei dont follow. Unless you are saying that the wave in question does not meet criteria to be required to have 2>1???
ReplyDelete2 does not have take more in time than 1.
ReplyDeletecorrect, but it 'can' in 'certain circumstances'.
DeleteI missed the reply to Marc. I think I know about 38.2% of this stuff. :)
Deletejoe thanks. im back on same page as you. one day you can share those 'special circumstances' if i havent figured it out by then lol
Deleteprior to moving (i), was (ii) required to be greater in time?
Delete..only in certain circumstances .. let me just say this for now; "degree can NEVER be compromised". There are ways time can fit with degree.
Deletelet me say this "THANKS"
DeleteFrom the bottom of the LD on 10/29, could we not be doing a Flat/X/ZZ? Its in a nice channel since then on SPX.
ReplyDeleteI don't think so ..because the flat failed. If it would have completed successfully I would say, "plausible, but not proven". But that is not the case.
DeleteGet the point but would think in any type of corrective series in a weak market, failure would have to happen to form the down sloping channel.
DeleteThis comment has been removed by the author.
DeleteDo symmetrical triangles have a high rate of success? I feel like the larger time frame triangles like 4 hours fail quit often while the intraday triangles work great!
ReplyDeleteReferring to crude oil as it is a possible failed bearish triangle now.
Likely complex leg of triangle; I warned about that yesterday. It's not over until upper trend line exceeded.
DeleteYes you did I just referred back to our conversation. So am I reading it correctly that the December 7th high to today's low is a double zigzag?
Deletelikely.
DeleteOkay thank you. Just making sure I was on the rick track for the most part.
DeleteTriangle trend lines can 'breathe' a bit - move out - within certain limits.
DeleteLast question just trying to gain a handle on this.... Is their any chance that is is a bear market ascending triangle or no is it symmetrical?
DeleteAs I read Pretcher book right now it says "usually" wave c is more complex so its making me wonder if this is not a wave 4 triangle but rather a B wave triangle that will break up and terminate for a wave 4. Not sure if that is plausible
Deletehaha ok thank you.
DeleteIt 'could' Robert; that is the real risk with triangles - that they morph into diagonals. That's the real reason traders have the expression, "trading is treacherous in triangles."
DeleteDownward diagonal may continue; there are no upward degree violations at the close.
ReplyDeleteET, I think i might have pointed out expanding leading diagonal on "December 10, 2018 at 11:46 AM".
ReplyDeletebut it was rejected due to less retrace for wave ii.
Yes, as it should have been E_D_T. Until there was a degree violation. Now it 'must' be accepted.
DeleteAh... nice... I was too forward looking :P. Agree with you.
DeleteYour comments have been right on the money, in almost every case, including this one - so keep it up! You are gaining much credibility here.
DeleteThis means a lot coming from ET. Thanks.
DeleteIn that case we would expect atleast 61.8 to 78.6 deep retrace up now ?
ReplyDeleteThat happens 'sometime', not always.
Deletecan't get a retrace like that. The black down line must hold for joe's (iii).
Delete30 min futures just barely held the line for (iii) to proceed today. quite amazing.
ReplyDeletelooking at joe's chart he post end of day it is post (ii) is not even in yet.
ReplyDeletei see us done with this w2, just as i saw us done with larger degree w2 in my posts yesterday. We will see. Its funny how the simple eyeball 5 down 3 up count from December 3 high is "right" - but how much back and forth it took to get it there. IF this is a wave 3 coming (which is what we are here to trade) then the joe's approach has not disappointed.
ReplyDeleteBuckle up...!!! :)
ReplyDelete