Today was the expected window dressing day (which started actually in last night's overnight session with Alphabet's revenue miss and stock decline).
Tomorrow is the first trading day of the new month as well as the FED meeting, decision, and news conference following. So, we could see some inflows, some reaction to the Fed, and all around some volatility. With the ES price still above the 18-day SMA, and daily slow stochastic still embedded it still has a positive bias although it is bumping up against its upper daily Bollinger Band, which lends a note of caution.
The Russell 2000 futures had two clear Elliott Wave patterns on the intraday chart, which is shown below.
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| Russell 2000 Futures - Intraday - Two Patterns |
The first pattern on the left is a clear, very whippy, Leading Contracting Diagonal a wave. This is a proven diagonal and the measurements were pretty exact. The b wave retrace was absolutely minuscule which is what prompts Glenn Neely to say that the b wave of a zigzag can be - at times - as little as a 1% retrace. This is awful stuff if one is looking for proportional waves. The c wave down was the bulk of the window dressing. Then, after a five-wave a wave up beginning after 10 am, a fairly rare barrier triangle begins with three waves down to (a).
It is hard to catch some of these patterns on larger time scales, so this one is presented for learning purposes. Notice how the a wave, up, forms part of the barrier. It is rare to catch this. Also while the (b) wave does not make a new high, the (d) wave just pips over the high but does not close above it. This is a requirement on the time-scale of the triangle.
Finally, notice with what precision the (e) turns around and bangs the lower triangle trend line yet avoids closing below the (c) wave. Also note how flat the MACD indicator is during this time period. This is very characteristic of triangles.
On the Russell, there is a potential for these three-wave sequences to become part of an ending diagonal. If so, this one would be wave (iii), higher, if it does bust through and make the new high.
Let's see what tomorrow brings.
Have a good start to the evening.
TraderJoe
A final chart with some (hopefully) salient observations.
ReplyDeletehttps://imgur.com/e6Z8Xig
I don't have any agenda with EWI except 'incorrect' counting. By incorrect, I don't mean the wrong direction. I mean they have shown several counts that "break their own rules", such as a contracting diagonal in GOLD with a third wave that is "too long" that I have written them about. They also have shown several counts that break the very definition of the term "degree".
DeleteSince I have written them and "gotten it off my chest" directly - including receiving replies on the topic - it is not as insidious to my wave counting as your note makes it seem.
I don't mind being "wrong". I have said I was regarding the extent of the rise. Let's see EWI was only wrong about Primary ((1)) down in 2009. Whoops!
What I will not do is break the "rules". May you never be incorrect in your market view ; )
TJ
thanks both of you
DeleteI appreciate and learn a lot from both of your posts. @tacharts, I follow you on another site and appreciate the details you present for your counts/methods there.
DeleteIt should be pointed out that EWI's count at the time of the mentioned post was (1)-(2)-1-2 DOWN. Not up. They were looking for a third wave down to complete an A wave impulse. Joe's problem with the count at the time was that 2 was much larger in price than (2). So Joe was counting a diagonal down while EWI was counting an impulse down.
I remember that post and was a subscriber of EWI at the time. They actually had (1)-(2)-1-2-((i))-((ii)) DOWN at the time of that posts where ((ii)) was bigger than 2 and (2). So from Joe's perspective, a double degree violation. A few days later they adjusted ((ii)) to 2. Then they adjusted the entire count to 1 down with a huge expanded ABC flat for wave 2 (with the current up move as wave C). Now they've changed their entire count to an expanding diagonal correction with the current up move as wave D (wave A was the Feb2018 decline).
At no time, through three different primary counts, has EWI had this up move as a B wave or even mentioned a flat.
I'll probably get this wrong, but here goes. As to this discussion that started in January, I think there was a lack of context given for some of the ideas that were presented. When you say "flat" that implies the end of the correction. Based on the depth/time of wave A, a flat is too small of a correction for the degree that Joe has for the September2018 highs. Once the current move exceeded 81%, Joe has alluded to a Flat plus. Meaning (I think) the flat will only be an A (or W if you prefer). Then we get an X and another corrective pattern. So in that way, we are still "on track" in a long term bear/corrective market.
expanding diagonal should have been expanding triangle
DeleteGood memory, jwtx12!
Deleteone large ending diagonal - https://pbs.twimg.com/media/D5Z3Td2WsAApsWT?format=jpg&name=large
ReplyDeleteIt is incorrect to call that chart an ending diagonal since your wave 4 does not overlap wave 1.
DeleteRegardless of how you ultimately view it, thanks to all those who took time to read my prior post!
ReplyDeleteand thank you forposting
DeleteThese price and time signatures currently work for a (c) wave of ((y)) in the Dow (YM) 4-hr futures. Note, we may only be in wave i of the final c wave. FED volatility could cause ii.
ReplyDeletehttps://invst.ly/aoa20
TJ
P.S. There are two pretty clear internal diagonals within the larger diagonal.
DeleteHi Joe, appreciate your thoughts always. It has certainly been a difficult market to get a correct count right away, however, no method is perfect. I just wanted to offer my 2c, and comment on your sub degree label of 1. It looks to me like 1 is an impulse wave, and not an a-b-c. While other labels seem to make sense, it does not fit with what rules tell us about ending diagonals. Thank you again for your hard work and dedication to this blog.
DeleteHi Joe,
DeleteSo you don’t have the triangel x wave as alt 1 anymore? Do you mean ((y)) might start at 25250?
Also if YM wants to do an expanded flat does it need to go over the top or not?
Thanks!
@Tom27; wave b in the NQ 100 was 'below' wave a. I don't think the wave was an impulse. It is even possible to move the 'a' up to where you think a 'three' would be, and be more certain of not creating a degree violation.
Delete@Erik B; based on the waves we have in place currently along with the current divergences, this is the best count I have on the Dow. The triangle may be insufficiently well-shaped.
Deletehttps://invst.ly/aobv6
TJ
Here is gold, a mess after 1267, not sure if this is a pre fed triangle or what.
ReplyDeletehttps://imgur.com/JD9OKyj
If its a triangle its a .786 and we are in d. The a bothers me with the lackof strenght.
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DeleteUpon further study this correction is longer than the last in time. That puts the 1,2,i,ii count in jeopardy. Will be fun to watch.
DeleteAs far as I can tell, we have had a degree change in the US 10-Yr Note Futures, as a result of the FED conference.
ReplyDeletei think thats reasonable thanks
ReplyDeletewelcome
Deleteand another 40 ndx points down in this wave we will have one there as well
ReplyDeleteThe Russell has taken out yesterday's low.
ReplyDeleteA new post has been started for the next day.
ReplyDelete