Here is the daily chart of the cash S&P500 index. As we noted yesterday, a top 'could' have been in place with yesterday's waves. We'd like to better define that.
 |
| S&P500 Cash Index - Daily - Overlapping, Diverging and Wedging |
We have been noting for weeks the difficulty in counting the up wave as an impulse (because any number of 0 - 2 trend lines have been broken). We have also been noting the divergence with the new price highs and the daily Fisher Transform Oscillator shown on this chart.
Right now, the cash index, while closing on the low of the day, also closed exactly on the lower wedge trend line you see drawn in here. Today was a rather large red down candle, one of the largest if not the largest of any down candle since the December 24th rise began. But, what we'd like to point out is that IF the 2,765 level is exceeded lower, the Fibonacci ruler shown indicates that the degree of the waves would likely have to change from up to down. Barring that, there is one last chance for a new high - but I'm not holding my breath. And, such a new high could be a failure high or a truncation high, as well.
Caution is the by-word. There was one way to count five-waves down to a new low today, so that must be respected.
Let's see how it goes and take it step-by-step.
Have a good start to the weekend.
TraderJoe
As 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 posture. 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.
ReplyDeletethanks joe
ReplyDeletethe trend change i believe would be close to 200DMA and lower BB.
additionally FANG stock index turned at exactly 61.8 retracement.
https://imgur.com/KwJdju9
ReplyDeletesymmetry
ReplyDeletehttps://imgur.com/oiCmAMG
The down wave chart numbering is not correct in the S&P500 cash index. If it were correct, as shown, then the Oscillator would have a lower low on III - whatever degree that is. Because it doesn't, it is not correct. I don't know why you post charts of this type. I don't get it.
Deleteit does on daily chart.
ReplyDeleteI new high would be awesome. But, there are way too many broken stock charts. Many leading stocks gave up all of yesterday's gains. The strong reversal today was very convincing for me. Plus, we have enough stocks now leading the downtrend. Finally.
ReplyDeleteSome are saying the potential outcome of the Mueller Report is worrisome and caused today's sell-off and if it's a non-event stocks will soar on Monday. Personally I think the Mueller Report will be a complete non-event but I don't think stocks will soar on Monday. Next week has some serious downside potential IMO. Stocks sold off before Xmas and have since rallied back to test the more serious levels of resistance. Technically that is all that's happened. Fundamentally however we are in global economic contraction which will last another 9 months. Economic data should get progressively worse over that period. This will ultimately be the driver of any downward re-rating of equity valuations. For example, today the German Manufacturing Index came in at 44 well the "expected contraction to 48". The yield curve is also forewarning by partially inverting, the Fed is more likely to cut than raise whilst on the political front European elections will be held in May. The results of those elections have the potential all by themselves to destabilise not only Europe but the whole world. The 3rd leg of the stool, as ET called it, sees Bulls at 53.9% and Bears at only 20.6% according "Investor's Intelligence" as at last Tuesday (3/19). I think the market has done its dash for the present.
DeleteThanks Billy. I was also thinking about the release of the Mueller report. Certainly a possibility, but based on the banking stocks getting clobbered the last four days, it appears to be a reaction based on economic growth and rates, imo.
DeleteAnother interesting video with historical and technical data
ReplyDeletehttps://www.ccmmarketmodel.com/short-takes/2019/3/22/nasdaq-signal-has-only-occurred-15-times-in-last-42-years
@Joe
Awaiting for one of your videos in the near future (Easter holidays?)
Taken from Neely FAQ's, on his site
ReplyDeletehttps://www.neowave.com/qow/qow-archive-924.asp
"Question of the Week: 3/17/2010
Twenty-years (20) after Mastering Elliott Wave, do you still mantain that the 0-2 and 2-4 trendlines should not be violated by any leg of wave-3?
Answer:
When it comes to standard (trending) Impulse patterns (5-3-5-3-5), the answer is YES. When it comes to Terminal Impulse patterns (3-3-3-3-3), it is an entirely different story. Terminal patterns are composed of five corrections strung together to form the last impulsion of a larger formation. Because Terminals are conclusionary patterns, the 0-2 and 2-4 trendlines ARE allowed to be broken during the formation of wave-3. Such breaks can even occur more than once during wave-3's formation. "
Yep, but not the third waves of the impulse A, or C leg.
DeletePerhaps this was already addressed and I just missed it? IF we did top this week, would we call it a double zigzag for ((C))?
ReplyDeleteI guess we can address that once a top is confirmed
DeleteHas DXY topped last week with an EDT as C and his now heading down to 88 or below?
ReplyDeleteThe Russel 2k is for me the easiest to count and it looks like it topped already for wave 2/B with a clear ABC since the december low. S&P500 and Nasdaq are more looking like they did an impuls up from the dec low, but you can probably count it either way. Maybe a deep wave 2 in S&P500/N100 coming while the Russel breaks or kisses its december low?
Thanks Joe,
ReplyDeleteI feel compelled to thank you once again for all the work you put out for your readers without charging a penny. Not only that, you are committed to following the rules of EW theory precisely. I'm a long term investor (not a trader) but I've followed your work for years and I'm always impressed by your patience and tenacity in getting the right count. I truly appreciate that.
agree
DeleteThanks very much, Rose. Very appreciated!
DeleteTJ What do you think of a tripple zz on gold if it breaks 1320? If so maybe in c of last zz now?
ReplyDeleteErik, Thinking the same. There is a triangle in this move up that ending last night.
ReplyDeleteSorry, Equal move put of triangle gets us a new high, a 1.27 extension gets us to the top TL.
Delete1324.5 Z ?
DeleteI think to hard to tell maybe 4 of c of Z we need a bigger downward degree change
DeleteMaybe the picture clears up this week. Thank you Joe for the blog!
ReplyDeleteWelcome Bill.
DeleteA new post has been started for the next day.
ReplyDelete