Market Indexes: Major U.S. Equity Indexes closed mixed
SPX Candle: Higher High, Higher Low, Lower Close - Spinning Top Candle
FED Posture: Quantitative Tightening (QT)
Make of it what you will, we were able to call a potential diagonal to the top bar today. This fits well with one of the options posted yesterday (#2). Here is the hourly chart of the futures.
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| ES E-Mini S&P500 Futures - Hourly - Potential Diagonal |
There is a triple divergence on the MACD, and there is an hourly bearish engulfing candle to potentially end the pattern. These five overlapping waves up, currently have wave ((5)) shorter than wave ((3)), wave ((3)) shorter than wave ((1)), wave ((4)) shorter than wave ((2)), but wave ((4)) overlapping wave ((1)).
These are all the requirements for a diagonal in a wedge shape - both in price and in time. The "spinning top" candle suggests that if it is confirmed lower, then a retracement, and or lower low might be seen.
In terms of the diagonal, one would like to see wave ((4)) exceeded lower by a few points as this would also create overlap in the cash on it's first wave up.
Usually, most-often, three-wave diagonals (3-3-3-3-3) are ending. IF so, then there should be a lower low in less time than it took to build the diagonal. That lower low - if it occurs - would be minuet (v). As always, diagonals are patterns that must prove themselves. So, remain patient, calm and flexible. The diagonal shows price can move +/-60 points in an hour in the lighter holiday trade!
Have a very good start to your evening and to your weekend.
TraderJoe
thanks joe. have great weekend. im learning a lot thanks
ReplyDeleteWelcome Marc and glad to hear it!
DeleteClassic bearish rising wedge price action. Plays absolute havoc with traders trying to trade without recognizing the pattern unfolding! Have a great weekend everyone!(
ReplyDeletehi joe
ReplyDeletethe wave v of ((iii)) goes on 2253 or even lower?
thank you joe and have a nice weekend
Yes, if the diagonal is 'ending' which is the most common case.
DeleteThanks Joe.
ReplyDeleteWelcome Berg.
DeleteNice!
ReplyDeleteso joe,
ReplyDeletehow are you sure, that w3 is not subdividing? meaning your (iii) count and the current (iv) count could potentially be ((i)) and ((ii))........ [that is 1-2, (i)-(ii), ((i))-(ii))]
I find it odd that behaviors seems reversed. For example, this current count of wave iv produces the largest single up day in market history for the dow.........and YET .......fails to produce the same of metric in the down direction....... and where is the uncovered gap down "point of recognition" that is the hallmark of a 3 of 3 wave......we had plenty of those gaps to the upside....and yet we see NONE to the downside???.......
am i sniffing glue here......????
Interesting. The purpose of a second wave ahead of a third wave decline is to convince the herd that the bull/uptrend is alive and well. I have not checked the put/call ratio but if the poster is correct about the current reading, this wave up has done exactly that, Think about it. If a corrective second wave produces the single largest one day gain in history, what do you think the third wave of the impulse down is going to do...?!
DeleteAs far as I can tell, the hallmark of minute wave ((iii)) will be a 1.618 extension of minute ((i)). So far, we are not there yet.
DeleteThanx Joe!
ReplyDeleteI was able to get a name dwn:).
So my question was, could this dwnturn be wave C of 4 of irregular flat? Counting from bottom 2009. Dow dwn to about 15k? Why, why not? Thanx again Joe.
With B wave as the top so far?
ReplyDeleteI understand the question. Even so, for that to occur, then one would still need to overlap wave (3), the high of 2015 in order to be corrective to wave (3). Then, it becomes a question of degree labeling - which, as far as I can tell, prevents that count.
DeleteIF we just witnessed a diagonal then it should be noted that YM (DOW futures) had a failed 5th wave. This, according to "Edgar" on the previous thread, is only allowed in an ending diagonal (ED). Is this a clue IF the market starts heading lower again quickly as it puts "Option 2" with a c of (iv) at Friday's high in the spotlight. I find it hard to believe the markets will make fresh lows in a such a short timeframe but am aware of the possibility. Instead, IF we make higher highs for the move then the ED will be invalidated.
ReplyDeleteGood catch. Perhaps the YM count is different, with the third leg of the ZZ having a truncated fifth to keep it shorter than three....
DeleteBecause the diagonal is not confirmed as concluded, there 'could' be one more lurch up. We have not yet ruled out an A, flat B, and a further C up of wave ((5)). Only price below ((4)) would do that.
DeleteJoe, could you provide a count from the 2007 high to 2009 low?
ReplyDeleteJoe, can you check my work. I believe this the count off the 2007 top.
Deletehttps://imgur.com/5vaReXf
Gerald. For the last time: I will not check any of your work where the "wave of interest" is not plotted with 120 - 160 candles, and is not done in reference to the Elliott Wave Oscillator. If you ask me again, I will no longer reply to 'any' of your further posts.
Deletesorry joe. didn't mean to get you upset. why is it 120 to 160 and not 34 * 5 = 170 if I want you to look at an entire 5 wave sequence or a complete correction? I thought 120 to 160 was just to find a wave 4 signature.
DeletePlease stop it. And stop with the false apologies. Oct 2007 to Oct 2008 is 12 months. With approx. 20 trading days per month that is 240 candles right there on your 'daily' chart, and you haven't even gone on until March 2009. In short, you didn't even try, and you ignore the method. One more irrelevant response, and there will be no more replies. Period.
Deletedown 20% off closing high was defended successfully 2 times in 2007 before it gave way first in jan of 08 then in march of 08 3rd time bears too much this was july of 08
ReplyDeleteQuick question:
ReplyDeleteIn a flat, if B must retrace minimum of 90% of A, what is the max it can retrace and still be valid?
Thanks!
See below.
DeleteJoe, As an echo of tacharts' question directly above, I understand why and how you are using ES to create a diagonal triangle. I also understand why and how you are placing wave (iii) at 2441 on 12/20/18. And I understand why you said the diagonal fits well with Option 2 of the 12/27 post.
ReplyDeleteIn that post you said: "The obvious weak point is you really have to stretch to see that b wave." Wave b is 249% of wave a in cash and 287% in ES. Is a wave b of a flat "allowed" to run 249% of wave a?
If an ending diagonal triangle is confirmed (which I assume would be wave c of that implied flat) is there a nominal target for the reaction? If so, what would be typical (in percent or points)? Thank you.
Neely has recorded some at 2.618 times (262%) in cash. Not sure about futures.
DeleteI'm also wondering about Options 1 and 3 of the 12/27 post. Though they're visually appealing, isn't wave (iii) in each of them 1.45 points longer than wave ((i))?
ReplyDeleteThough I'm seriously bogged down in the Neely book, I thought I recalled that a subwave of (iii) couldn't be longer than higher degree wave ((i)). Please correct me if I'm wrong. Thanks!
That is a good reason to consider Option 2.
DeleteJoe, i could use help if you are willing and able.
ReplyDeletefor several weeks ive been trying to get help with the count since 12/3. I do not see how any of the 3 options you propose are the best alternative. The only count which is valid (2) can be modified to make it measure better.
a becomes (iv) and b becomes (v).
b is an impulse wave i think.
i have provided a valid count in link.
We are at a critical juncture. I believe, possibly incorrectly, that using your methods we WERE able to predict the move off the low to be a larger degree than you continue to count.
IF the move from (ii) to (iii) is an impulse in option 2 then why do we not count waves a and b as (iv) and (v)? Im looking at measurements not by look. It seems more proper to count a as (iv) (is a large wave up in the down move just takes little time) and b as an impulse. That gives us the possibility of a complete 123/ABC off october highs which in my opinion is a very very big deal. And its by measurement not look.
If this count i propose is invalid it would be quite helpful if you could add some more labels to the options 1/2/3 so as readers we can try to determine how to count based on our understanding of violations. The wave count from 12/3 is an opportunity to advance all our knowledge. I continue to bring this up because its never been addressed and i think its a rather important evaluation and you are the only one that can validate the count based on your rules so its a learning experience for all of us. Even if market turns down from here (as both counts would suggest), i would hope we can resolve by measurements.
this the count of a and b and ewo signature of b
https://imgur.com/a/sC3kLrj
As far as I can tell, there are not 120 - 160 candles for "the wave of interest" on your chart, and the EWO is not plotted as a histogram. Therefore, I will not provide feedback on your chart. Same as Gerald, above. If this should occur again, I will not be responding to future posts.
Deletehttps://imgur.com/a/zcT7yl1
DeleteStill plotted incorrectly - with that massive gap in prices. And wave 1 at that location is 1) not the "whole" wave 1, which starts on Dec 12th, and 2) it is longer than minuet (i) - which is another obvious degree violation. Any more non-sense replies, and I stop responding.
Deletethis is the b wave of (iv) from option 2, which i count as impulse.
DeleteThe gap is the way bloomberg displays the prices. I hope you can overlook the gap and focus on the possibility that the a and b on option 2 are (iv) and (v).
Nice hidden divergence 1 hour spx
ReplyDeletehttps://www.tradingview.com/x/wnf5gRWG/
I have no idea what you mean. If you don't care to make complete posts, or to express a complete thought - and to help others learn - then I will stop responding.
DeleteMy fault I'll elaborate. Give me a few.
Deleten reading “Technical Analysis for the Trading professional” by Constance Brown. She discussed RSI positive and negative reversal. The picture posted is a negative reversal or hidden divergence. I used closing price on rsi peak for calculations.
DeleteAfter reading this chapter I thought oh boy I found “gold”. I reviewed old daily and weekly charts and couldn’t produce reliable results. The divergence is in itself a signal the calculations are another. In other words if I see a negative RSI divergence I’ll continue with the trend 1 time frame higher.
I need more time to study the information I’ve read to help provide positive results. With the negative reversal signal on this 1 hour chart, I look at the daily and notice the 13 34 ema are trending down. With that being said an up trend must prove itself.
I’ll add another chart
https://www.tradingview.com/x/WPiHLDTb/
ET, Is that better? If you or anyone else have questions I can try to help. I haven't reached the chapter where she discuss the composite index yet. I did post the brief information I had. I like what I'm reading in this book. She has a new book coming out some 1000+ pages. https://aeroinvest.com/books.htm
DeleteYes. Much better, Bill thanks. It gives me and the others something to sink our teeth into.
DeleteJoe again thanks for your hard work. After reading all these posts I might need a drink. Can see your diagonal very clearly on my charts also. Now we need a little time to see what happens next. Again Thanks My study for Sunday is going to be around figuring out my entry.
ReplyDeleteIt should first be about figuring out if there is at least confirmation below wave (iv).
DeleteET, on hourly chart from 12/3 till yesterday, I am seeing 124 bars/candle & the max reading of EWO for down side below 0 line is 116.551. 40% of that is coming out to 46.6204. However current EWO above 0 line is 59.36.41 which seem to have violated 4th signature. Can flats do that ?
ReplyDeleteI also had a similar question. The chart at the link below shows the elliott oscillator exceeding the -40% level recommended for a wave (iv). How much of a concern is this for you Joe? Chart link here: https://www.tradingview.com/x/HQvKQZrX/
DeleteOver 80 minutes and it looks fine.
ReplyDeleteBut,if you look at bigger time frame,
180 minutes = 180 bars - confirms in wave 4 from October highs,
working on less bars,
240 minutes from october high (120 bars) leads to interesting observation...
if we are higher by 1% in a week it will imply we have complete 3 down from October high. The same is true if we are above 2540 in 3 days.
We should learn a lot soon.
Observation:
ReplyDeleteThe current up wave has just nipped a 50% retracement of (iii) and backed off in a rather abrupt way. On a 2 hr chart we have a spinning top and 3 consecutive Doji. That's 8 hours of indecision. Stochastics are embedded above 80 on the 2hr chart but are just coming out of embedded below 20 readings on a daily chart. This is shaping to be an important inflection point for the market. A gap opening on Monday may provide a clue as to which way the indecision will break.
My two cents
I'm with you, great insight and adds weight to the ED Joe has shown, with a possibility for a slight high first, then a faster decline that takes out the low in less time than took to form. Perfect Bear trap in the making. Then a more substantial correction.
DeleteJoe,
ReplyDeleteGeneral Question. In the case of a Running Flat what is the minimum wave "C" must retrace wave "A" to be satisfactory "completed" and what is the minimum size of "C" to "A" to be considered satisfactory. I do appreciate that this structure is considered less common to the expanding flat. Thank you.
It should just be "Satisfactory" not "completed".
ReplyDeleteIn addition to ending diagonal on ES which ET has shown,
ReplyDeleteone can see an ending diagonal on 5mins spx chart.
wave 1 - 13.30 - 14.15
wave 2 - 14.15 - 14.30
wave 3 - 14.30 - 14.40
wave 4 - 14.40 - 14.45
wave 5 - 14.45 - 14.55.
This fits in well if we are counting from low
wave A - 2346.58 - 2467.76
wave B - 2467.76 - 2397.94
wave C - 2397.94 - 2520.27 & sub divides in 5 waves with alternation.
wave C sub divides in 5 waves as follows
wave 1 - 2.15 - 2.50 (thrusday, 12/27)
wave 2 - 2.50 - 3.00 (thrusday, 12/27)
wave 3 - 3.00 - 3.40 (thrusday, 12/27)
wave 4 - 3.40(12/27) - 1.30 (friday, 12/28)
subdivision of runningtriangle
wave a - 3.40 - 3.50 (thrusday, 12/27)
wave b - 3.50(12/27) - 9.45 (friday, 12/28) Running wave b
wave c - 9.45 - 10.35
wave d - 10.35 - 12.40
wave e - 12.40 - 1.30
Notice wave e is coming down to overlap with wave 3
From 1.30 ending diagonal shown above correctly fits in for 5th wave.
We also have alternation in C wave for wave 2 as sharp or flat &
wave 4 as running triangle.
Please correct if am missing anything.
To add to it, this ending diagonal has been taken out in less time that it took to form it.
DeleteA new post was added for Sunday.
ReplyDelete