Today, as the banks and 'smart money' decided what they wanted to do in relationship to the FED's newest and greatest "easy money" policy, the S&P500 cash index "went over the top" of the prior hourly high. The Dow Jones Industrial Average has not yet, but it could. Towards the end of the session the cash markets backed off ever-so-slightly, allowing the continued drawing of a potential wedge-shaped pattern, as below, which might still be incomplete.
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| S&P500 Cash Index - Hourly - Potential Diagonal |
There is one way to consider the pattern as completed, by including the March 4th high as wave (i). But, the trend lines on that pattern would be skewed, so, with the new higher highs today, I am making a conscious decision to publish the longest pattern in time (knowing full-well it 'might' break down early).
Something else has been added to this diagram. For wave (iii), I think you can see that it is true that it is currently entirely above a line from ((B)) to (ii). But, notice within each of the sub-waves of (i) that you can see that each of the third waves ((3)) are above a line from their respective origins to the respective second waves ((2)). And, the same is even true within wave ((1)) as well, in regards to wave (3).
Hopefully, this helps you in the wave identification process.
Also, we must note that yesterday's tentative confirmation of the spinning top - as a
high - was invalidated in this index, today. I had called it tentative,
because even though technically correct, the point drop that resulted
was quite mild.
Have a very good start to your evening,
TraderJoe
thanks joe.
ReplyDeleteMaybe you can answer my question about 2nd wave b waves using the above chart.
if blue a was red (1). could the second red (2) stay where you have it placed? can the blue c of red 1 be a b wave of red (2) in expanded flat? The diagram does not necessarily have to be a diagonal at this point, correct? We can be at a point of acceleration the iii of 3 of impulse rather than contracting diagonal ending pattern. So how do we know the difference lol
Another emotionally driven question. 1) then you would have two 'running flats' in a row, based on degree, and that would be very poor alternation, 2) the probability of being over a daily Bollinger Band on any given day is only 5%, so count with the odds, and 3) this 'partially' why diagonals are potential patterns only, that must prove themselves in every detail.
DeleteIf you don't 'like' the pattern wait to see what the market looks like the next day, and always, always know where each wave would invalidate (i.e. (iii) can not be longer than (i).) Otherwise, no more bellyaching, as this is what all Elliott analysts initially experience.
"According to the William O'Neil + Co. database, 388 stocks and ETFs on the Nasdaq and NYSE hit 52-week or all-time highs." - IBD 3/21/19
ReplyDeleteAlthough the market looks somewhat messy, it clearly has a lot of strength again.
TJ Isn’t this just an beautiful zigzag on transports? Finally a chart with a potential B wave without any degree violatons..huray..
ReplyDeleteAlso both industrials and transports are confirming each other (DOW theory?) with breaking the lower trendline?
https://i.imgur.com/WFeYRYu.png
And the uper decscending trendline is just above so they have to decide shortly.
DeleteNice Work
DeleteThanks Joe for all the work. When is SPX expected to hit a fresh ATH.
ReplyDeleteWhen Jerry P throws in 1) the kitchen sink, and 2) the bathtub. Unfortunately I don't control printed money.
DeleteThanks Joe, what about rules for b waves, especially in second waves? Can you ever address that - I am lost on that concept and have read conflicting rules on the blog.
ReplyDeleteB waves have few rules. They can be 'any three'. Degree considerations must apply.
Deletein an expanded flat for second wave the b wave can be larger than up waves of first wave? larger than first wave?
ReplyDeletePlease stop with the badgering on this too general question. Either provide a specific example with a chart, or I can't help. No chart, no further replies on this topic. No hypothetical examples.
DeleteHi ET,
ReplyDeleteCan you share how you pick the time frames to count? I understand using the 8-fold method with the 120-160 candles in a potential impulse but it doesn't seem like you always use that method. Do you already have your larger time frame counts made and then you choose to stick with the 4 hour and lower time frames? Thanks
I'm really not sure what you are asking. Markets can be counted on many different time frames from annually to monthly to weekly to daily to four-hourly, hourly, and lower depending on degree. When you have an idea where the larger degree time frame is (say weekly), you count the next lower time frame (say daily) to see if the expected count develops, and so on ..
DeletePossible barrier triangle on US dollar? This fits well with the double zigzag TJ mentioned in the cmments 2 days ago. I believe the E wave is finished, it will be hard for the triangle to form properly with another down turn?
ReplyDeletehttps://i.imgur.com/JMuEeKY.png
Doible zz on Gold
DeleteES now down to 62% retrace. Let's see if that holds or can attempt 78.6%.
ReplyDeleteThis is exciting. A good uptrend almost never retraces this much after such a strong rally the day before.
DeleteZigzag up yesterday might have been (v)?/((c))?
ReplyDelete..can only conclude that if 2,813 is taken out lower.
DeleteMight have been a standard impulse with truncation yesterday.
ReplyDeleteMaybe but if so the 0-2 trendline didnt hold..
Deletebig wave - change of at least degree
ReplyDeleteis ET pattern above invalidated or gave degree violations?
ReplyDeleteI have repeatedly asked that futures be used to describe degree violations. As the 4-hr ES shows, below, no degree violation until or unless 2821 is exceeded lower. I'm not saying such can not happen, I am only showing how to measure.
Deletehttps://invst.ly/acqf7
TJ
https://imgur.com/8GumOUR
ReplyDeleteES tagged 78.6%
ReplyDeleteLooks like the EDT from 2722 was 2821-2803-2852-2817-2860.
ReplyDeleteSee note at 11:27, above.
DeleteFutures now below 2821, and there is a turn of degree.
ReplyDeleteDJIA has the new daily low.
ReplyDeleteSure reminds me of 2010 B fractal with this last three wave do hickey.
ReplyDeleteI just want to say what an amazing job you did through all of this, Joe. You have really shown me what Elliott wave analysis is about and what it can do. Thank you for everything you do!
ReplyDeleteWelcome Walter!
DeleteES has the new daily low, as well. Markets getting in sync.
ReplyDeleteNext step, apply the 8Fold Method to the wave to confirm the impulse and the potential end of it. Already having a hard time on the SPX. Maybe I'll try another index
ReplyDeleteGold 5min looks extremely corrective after yesterdays decline. Could be in e wave of triangle for a b in here. BBs getting narrow.
ReplyDeleteI thought it was done at .618 with truncated ed but market missed the memo that it should want what I want.
DeleteParis Futures 3rd wave down has so far reached 1.59 times the 1st wave down. In the DAX Futures however the 3rd wave down has so far only reached 0.81 times the 1st wave down. DAX would need 0.5% below the low of the day (LOD) for 1 = 3 and 2.5% below the LOD for 1 x 1.618 = 3.
ReplyDeleteKBE (Regional banks) has completely rolled over. Yesterday's strength in most sectors has completely reversed. There is no longer a bullish case for higher market high, imo.
ReplyDeleteWall Street has an excellent opportunity to rally strongly late on Friday as has been its usual custom recently. After all they could not get enough equity exposure yesterday and current prices are even cheaper than at any time yesterday. Failure to perform a meaningful late session ramp today would be another "tell" the tide is turning. If the Wall Street highs are in perhaps this chart originally posted on 19 March by "David" works. Note the "2860" marked on the chart as the minimum target for the 5th wave of the diagonal with yesterday's coming in at 2860.31.
ReplyDeletehttps://pbs.twimg.com/media/D1t1irBU8AEX9q6.jpg:large
Unfortunately that version of an ending expanding diagonal does not work. Price is good for the 5th wave but the 5th is shorter in time than the 3rd wave.
DeleteCould be we are in c of B of 5?
DeleteVery possible BBR, can't rule it out. That's one way to extend the time required for the 5th wave. Furthermore that possibility stays on the table whilst the market keeps above the wave iv low in the diagonal which is 2722.27.
DeleteExtended 1st wave down ?
ReplyDeleteNoticed we now have a SPX cash gap from the top / open
ReplyDeleteNDX on the rally broke above its upper trend line and today has come back down to it for a possible back test which would be bullish if it holds the line. The trend line sits presently at 7355. NDX currently at 7370 with some mild penetration a little earlier down to 7340. Trade below 7320 would swing the index bearish.
ReplyDeleteSPX trying to hold 4hr channel. Have a great weekend all.
ReplyDeleteES & SP500, there is a degree chance (upward) in terms of price and time. The wave is more than 30%, and it is the longest correction in time, and longest correction in price. This means the down wave and the up wave can be of the same degree.
ReplyDeleteTJ is it unlikely that this is iv of ((c))?
ReplyDeleteErik, we're sitting very, very close to the S&P daily trend line. Watch that for clues. Lower lows from here would not be healthy for an upward count.
DeleteThanks!
DeleteCash and futures have broken the low.
ReplyDeleteAs suspected market participants had no stomach for rallying stocks into the close. Instead, after a mild retrace, the indices reversed and finished very near their lows. In continental Europe the DAX and CAC look busted even though the DAX has only managed a 48% retrace to date. The DAX weekly candle is an outside reversal to the downside of the LAST 3 weekly candles closing the week out below the lowest point of the previous 3 weeks. Was looking NDX to trade below 7320 specifically but stubbornly held its ground with the low coming in at 7323 so lights are still flickering in that sector for mine but a gap down Monday will quickly change that situation. The biggest issue for EW practitioners is Wall Street refuses to give a clear signal that the top is in. Other practices, using different methods, may be better informed at the present moment on the market poster. Then again they may not be. The market had the majority hugely bullish only yesterday whilst today the exact opposite situation exists. Will Monday reverse again? Possibly on Wall Street but I'm not sure whether there's any realistic possibility for Europe.
ReplyDelete