Yesterday we cited five criteria why more downward movement in prices should be ahead of us. Today's lower low tends to confirm that view. Prices initially played with higher futures just shortly before the open, but lost the gains as the market opened. Prices declined largely for the balance of the session with moderate backing-and-filling.
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| SP500 Cash - Daily - Fisher Transform Lower Low |
As well as the lower back-test line we cited yesterday holding, the lower close today sent the Fisher Transform Indicator to its lowest low since the double-divergent peak.
The chart shows only a few of the larger several gaps that could fill. The serious student should highlight them all.
By the end of the futures trading day (5 PM ET) each of the Dow (YM), S&P500 (ES), Russell (TF), and Ndx (NQ) futures had lost their embedded daily slow stochastic reading. It is now below the 80 level on each of these equity indexes. And only the NQ has not crossed the "line in the sand" or the 18-day SMA. Each of the other markets now has the "negative bias" from doing so, and the Russell seems the weakest. It is already half-way down to its lower daily Bollinger Band.
Here is the daily chart of the Russell futures.
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| Russell 2000 Futures - Daily - Weakest of the Group |
The red arrow on the above chart points to a peculiar failure we noted where the S&P500 cash, ES and NQ futures made a new high, but the Russell 2000 and Dow futures did not. So, this chart has lower daily highs and lower daily lows. And that means the "swing line" is bearish. Price is also below the 18-day SMA so the bias is down. The two are not fighting each other. Further, momentum is down and the daily slow stochastic is not yet in over-sold territory.
Because of the length of decline in the Russell (i.e. number of price points traveled lower), in this index we can say that the degree of the wave has turned. We can also - just barely - say this about the Dow (YM). We can not yet say this about the ES, or the NQ futures. But, even so, IF the week closed here, the ES would have a large weekly bearish engulfing candle. I hope people are paying attention.
I should add today that we were able to count five-waves down as a contracting leading diagonal on the intraday chart. If you'd like to look that one over, you can find it at this LINK.
Cheers and have a very good start to your evening.
TraderJoe
Just fyi - the ES futures exceeded Monday's low in the after hours, tonight.
ReplyDeletethanks joe
ReplyDeleteright with you
Joe - what do you think of this count on the Gold weekly chart?
ReplyDeletehttp://www.321gold.com/editorials/captainewave/captainewave030619/gold_weekly.png
Other than saying there are several degree violations I won't comment further. It is not my task to review everyone else's work.
DeleteDavid -
DeleteI've been keenly looking to get a good count on the metals complex also as I think that's where the next long term opportunity is. There are several counts out there that puts gold in a 1 2, i ii posture. They are using the standard EW guidelines.
I certainly see Joe's point and this blog uses Neely's methodology on EW rules.
All I needed to know is if there are degree violations, thanks!
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ReplyDeleteDraghi Draghi he's our man. If he can't do it, no one can! Goooooo Draghi!
ReplyDeleteThis morning's gap down in cash could well be an acceleration gap.
ReplyDeleteYes, it's a three-of-three; hourly gaps are beginning to be filled.
ReplyDeleteIt's time to begin to draw a "base channel" like the one in the SP500 15-minute chart, below, and see if the lower channel line is exceeded to the down side.
ReplyDeletehttps://invst.ly/a7yzf
TJ
Joe with you on the channel drew it yesterday as a possibility, it clearly is. As I learn from you I'm guessing that if this is a third wave it should terminate about 1.618 the length of the first down wave, correct. Great work you amaze me with your knowledge.
ReplyDeleteYep. With the initial diagonal, they 'often' create a 1.618 wave. Not always.
Delete4th wave triangle forming?
ReplyDeletemaybe bigger diagonal off top still forming still in wave 1 down
ReplyDelete4 of 3 on spx? sharp to alternate running correction yesterday afternoon
ReplyDeleteStopped right on the base. Need some payroll numbers to get the party started.
ReplyDelete8 points from a wave 1 overlap.
ReplyDeleteThx Joe, I have been a reader for several years and EWT follower for several years. You do great work and I think you show how much work is involved to accomplish that.
ReplyDeleteI remember you indicating before that one day it just clicked for you. One of these days, an inspirational story like that you help keep me motivated to keep up the hours of work it takes (even on a part-time basis).
Welcome Paul. Very glad it helped.
DeleteSPX looks fine for the EWO as a 4 of 3 from 2796 and 5 could extend because 3 was 1.27.
ReplyDeleteJoe, at about 1 PM today NDX's wave iv of 3 overlapped its wave 1 (from March 4). Any special notes about such an occurrence? Thanks.
ReplyDeleteNQ futures have no such overlap at 1 PM.
Deletehttps://imgur.com/N29ncKa
ReplyDeleteDownward wave has reached 90% of the upward wave. Qualifies for b wave of flat or next impulse downward.
ReplyDeleteRussell 2000 futures have a new low of day.
DeleteES now has the new low of day.
Deletenew es low
ReplyDeleteat mid channel.
ReplyDeletehttps://imgur.com/HaAejSV
Anything wrong with this being only 1 of 3?
ReplyDelete@BBR, yes, it would be a degree violation if this was i of 3, because i would be longer than 1. If you will ask your questions at least using 'relative' degree symbols, it will almost help you answer almost all of your questions. There is no such structure as 1 of 3.
DeleteThanks for the response. Need to do more checking and less typing. Thanks again!
DeleteThe wave v of 3 need to extend so wave 3 overall ends outside of the channel. Don't take that to the bank, just trying to reiterate what I learned.
ReplyDeleteSince the Dow has not made a new low, and only made it to 78.6% down of it prior up wave, and several other indexes made marginal new lows, it is possible triangles are forming for a fourth wave. The S&P and Rut might make "running triangles", while the Dow made a regular triangle. Watch to see if the Dow (YM) stops its rise at ~25,505, again, basis YM.
ReplyDeleteJoe
ReplyDeleteInterested in your comment about running triangles in the Rut and SPX. Are running triangles more likely in these indicies because of their relative weaknesses?
Thanks for confirming degree. I was counting the same.
ReplyDelete