Price remained above the 18-day SMA, and therefore still has a bullish bias, although the slow stochastic is in over-bought territory. And, the swing-line (higher highs and higher lows) is still up. More-than-likely, the "smart money", is still targeting the daily upper Bollinger Band, as below.
 |
| ES E-Mini S&P500 Futures - Daily - Outside Day Up |
Today was actually an "outside-day-up", and it was again riddled with speeches from the FED Chair and other members. Being an outside-day-up, it would be significant only if the low of today was taken out in the next two trading sessions. The above analysis is the first reason the diagonal is gaining odds.
The second reason, as discussed in yesterday's comments, is 'there is no sign of a clear topping candle on the daily chart.' There is not an evening star, or an inverted hammer, or a bearish engulfing candle. The upper daily Bollinger Band coincides with minute ((c)) = minute ((a)). So, this level is likely to provide some still resistance to upward price movement. Is the 100 period SMA (the green line) out of the question? Since it is inside of 1.618 x ((a)), it is not. As a result, patience and flexibility are still greatly needed as the trading algorithms and the news continue to present overlap upon overlap. This 'slowed pace' of both down and up price movement may be well in-tune with the personality of a diagonal wave.
Have a very good start to the evening.
TraderJoe
On W5000, really clean c = 1.27 a for 1.
ReplyDeleteThanks Joe for the great comments! I must say that 90%+ of the EW community is somehow always operate with a bearish bias (to which I don’t understand why), you stick to the rules and are truly balanced which is hard to do and a trait I highly respect.
ReplyDeleteAppreciated, Jay! Thanks.
DeleteThe unending parade of three wave movements in the market fits well with the diagonal case. Some have observed that so far as wave personalities are concerned, diagonals tend to appear when an impending trend change is being fiercely resisted.
ReplyDeleteFrom what we know about role of central banks in modern global markets, that makes an awful lot of sense...
Agree Verne.
Deletecan either of you explain a bit more about 3 waves and mood and diagonals? thanks
ReplyDeleteI hope no one thinks this 2-1/2 week up move is going to be sufficient to correct the 12 week decline. Why what would Neely say? Perhaps so far it's a partial a wave impulse with b and c to come to form a zigzag.
ReplyDeleteJust a thought, no comments necessary.
Hm I had the same thought looks like it’s morphing into wedge shaped (a) of zigag? And why can both legs be counted as diagonals on ES? = bad alternation, so 12345 makes more sense?
DeletePT -
DeletePerhaps something like this?
https://imgur.com/b4op0qr
PT -
DeleteOr perhaps this?
https://imgur.com/fp4YFql
PT -
DeleteOr one last alternative?
https://imgur.com/faoPX1j
tacharts .. please stop posting this ridiculous "numbers and letters soup". The number of alternates you have, as well as the fact that many of them break clear Elliott Wave rules indicates clearly that you do not know what you are doing. This is not a place for that nonsense.
DeleteJoe:
DeleteI first want to apologize for my number/letter soup! My focus is on where price may be going and how it may get there. To my detriment, I have not spent my time on being a purist as I probably should. So, I am guilty as charged. Hopefully, those that have viewed material I have offered have not been so distracted by this that they couldn't see the concept presented, as that is
the point of the offering.
Regarding the other issue, I do see now, and must concur, that this is not the place. I have learned a great deal regarding the AO and how it can greatly aid wave identification. Probably the thing it helped me with the most is channeling. I am very appreciative of this! So I will leave it at that.
Thanks again.
Joe, Failure [Y], C of ((ii)) @ 2800, What if that was wave A and not C?
ReplyDeleteWave B commenced at [Y] failure, and this current wave is C to complete a running flat, unlikely that it completes an expanded flat due to length of B, but its still good for a running flat, and the ES made a habit of it. Since 2009 low, most new structures started as such. The only issue is the B wave is a little long, but rules were not broken.
My Target for wave C to end is 2700 to 2750, before wave ((3)) starts.
Only possible if overlap occurs. However, IF overlap occurs, then it is a viable alternate.
DeleteMarc:
ReplyDeleteAltbugh Frost and Prechter classify diagonals as impulsive, some analysts argue they sbould be considered corrective. While EDs do trace out five waves,the reasonig is that the series of zig zags is symptomatic of inherent price weakness,resulting in an inability to trace out typical impulsive subwaves in the motive advance. Considering the violence with which EDs generally reverse and retrace the move, there could be some merit to that point of view.
Verne, I don't like correcting people on fine points, but the above information is incorrect. There are two broad classifications of waves; Motive and Reactive. Motive waves move the price forward with the trend, Reactive waves move price backward against the trend. Impulses and Diagonals move price forward with the trend, so they are Motive Waves. All corrections are classified as Reactive.
DeleteAnalysts who say that waves that move price forward (diagonals) should be classified as 'reactive' a) first don't know what they are talking about, and b) are being self-contradictory. Yes, they are made of zigzags. We all get that. But, Frost and Prechter changed terminology from "Impulse versus Corrective", to "Motive versus Reactive" a long time ago. Some people just don't keep up with the field.
Point well-taken ET. Some of the analysts I know who hold this view are very competent and simply disagree with Prechter on the matter of diagonals specifically. Discussions of trend and motive waves can be very tricky. For example, you would be crazy to deny the trend has beem "UP" the last ten years However, if you believe we were in a B
ReplyDeletewave, as some EW analysts still do, the entire move technically would have to be considered corrective NOT motive.
Granted it is a fine point, it is a critical one for us as traders. One of the most egregious errors of Prechters analyst Hochberg, was consistently failing to recognize expanded flats could make new highs, even in a counter-trend move. Thanks for the clatification. I was simply trying to explain what some analysts believe.
The people who believe we were in a B wave lasting ten years are not competent Elliott analysts. You can listen to them if you want on that point. I don't.
DeleteThat might well be true, but I have learned over the years to bring a modicum of humility to views that differ from my own.
DeleteWhile not everyone considers the move off the 2009 lows to be a "B" wave, there are others (including someone you know well) who consider the move "corrective". I am always amused to hear folk chime in with sanctmonious statements about folk doing damage to EW theory.Has anyone followed Prechter's calls lately? Lol!
17 minute mark
Deletehttps://www.neowave.com/interviews/interview-201710.asp
Yeah, right. One only needs to go to the NeoWave site. Click on the "Forecasting" square. Then, click on View Sample - which is for the S&P500 cash index. If he "never changes his wave counts", what happened to the lovely little (c) ? wave down that never materialized?
DeleteOh, there is lots of humility here. But, what I have learned is that BOTH the NeoWave service and EWI are 'simply' not practicing what they preach. IF we have had a :5 up from 2009 to 2018, it 'needs' to be counted that way. Period.
On that we heartily agree!! ☺
DeleteThese Elliott Wave "analysts" do such a disservice not only to their subscribers, but also to the Elliott Wave practice as well. We have seen here that careful, thoughtful analysis DOES allow you to be consistently on the right side of the trade. Throwing up numbers and letters with little regard to rules and measurements is far too common. I feel really bad for those followers, but am really glad I found Joe and this website
ReplyDeleteI'll 2nd that, Walter.
DeleteI have been focusing on time rules especially in regard to corrective waves. PT pointed out the time component earlier in the comments. In the Neely interview TJ published Neely stated that w2 must consume more time than w1 and w4 must consume more time than 3. I stated in the comments last week that we should not have attempted to call minuette iv before it was complete in time. It completed in time but i invalidated in price. We find ourselves in the same situation. i is at 2603.54 now yet we are trying to call iv when time dictates that it is at minimum a week away based on time of iii. It seems to me the only path in which price won't invalidate is W X Y going forward for w4.
ReplyDeleteHello Verne.
ReplyDeleteSo, do you think we've had 5 waves up since '09?
That would be at odds with you-know-who who seems to think new highs ahead in a wave 5.
Separately, he appears to not recognise that the creation of inflation is due to the creation of new money units, and the central banks can do that at will to prevent deflation, until confidence in the currency itself is lost (c. 2032).
Seeing one more ending diagonal on SPX 2hr chart. Hopefully this will be the last one.
ReplyDeletewave 1 2443 - 2595
wave 2 2595 - 2562
wave 3 2562 - 2597
wave 4 2597 - 2577
wave 5 2577 - should taken out 2597 within next 2-3 candles.
After that it will exceed time taken by wave 3.
At max wave 5 can go to 2613, after than it will exceed lenght of wave 3.
So far
1 > 3 > 5 (in time and price)
2 > 4 (in time and price)
wave 2 is so far the longest retrace for the wave from 2443.
All depends on 5th wave shapes up.
:top just wanted to post the same, i think it is finished now, same in the Russel 2k.
DeleteWe can also see 5th wave failure but that can be confirmed only after 2443 low is taken out i think. ET any thoughts ?
Deleteok mine is different. I have a double zigzag from the low on dec 24th. The last zag develops as an EDT right now with the last wave still missing.
DeleteThe last C:
1: 2547->2596
3: 2562->2599.5
5: 2577->currently in motion, should not breach 2615.
Nice.
DeleteI wanted to make a final comment with regard to folk I refer to as EW "Purists" who contend that waves are immune to any kind of exogenous influence, and certainly not central bank meddling. Prechter himself is famous for holding this viewpoint. I sent him a chart of the S&P 500 overlaid by the FED Q.E. program but got no comment. Most people, not all, that think so are not traders. I will give one glaring example that every real trader on this site will instantly recognize, and that is fib retracements. Most of us figured out years ago why our stops placed in the market were being so precisely run. If you are a trader, you know EXACTLY where the algos are now running retracements to,instead of 1.618. I have to smile every time I see a chartist still using the old number....
ReplyDeleteVerne, I'm much newer at this than you, so I won't ask you for any trade secrets. Recently I've measured retracements often occurring between 1.40 and 1.44. Am I warm? Thanks.
DeleteAcutally Kelly O, they program to run the re-traces PAST 1.618...! :)
DeleteOK, that's helpful. I've seen several 2.38 - 2.62 as well. Thanks!
DeleteAround 1.71 "conveniently" common also... :-))
DeleteThanks very much, Verne!
DeleteHuge problem for spx breaking above central-line of zigzag? Maybe a diagonal forming I guess you all can see it
ReplyDeleteThis is what I see today.
ReplyDeletehttps://invst.ly/9rerg
TJ
..best alternate for me is that, IF the low of the day is exceeded, then the up wave was only b of (ii).
DeleteAnd maybe your (i) = (iii)?
DeleteAlso might be a barrier triangle working it's way out from the 2595 high of yesterday.
ReplyDeleteI meant to say the 2595 high on 1/09
Delete