Besides getting a follow-through downward from the results of the FED meeting yesterday, the Dow handed bulls another headache - a critical overlap.
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| DJIA Cash Index - Daily - Overlap |
The overlap is shown in the chart above as the overlap of minuet (b) wave of minute wave ((x)). This is not good for those trying to count an impulse. The third headache is that the Dow Transports now also have this same overlap.
For those who don't want to dig around for it, here is the chart of the Dow's potential ending diagonal (c) wave, using the four-hour futures.
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| DJIA Futures (YM) - 4 Hr - Diagonal Broken Lower |
The diagonal is perfectly constructed with each of the waves the correct length, wave (v) is shorter in price and time than wave (iii), wave (iii) is shorter in price and time than wave (i), wave (iv) is shorter in price and time than wave (ii), and wave (iv) overlaps wave (i). There are two internal diagonals as smaller degree fractals in the chart. One is the c wave of wave (iii) - which is telling because that price was never exceeded higher. And the second one is the leading contracting diagonal a wave of (v). There is further a perfect signature of a diverging Elliott Wave Oscillator (EWO or AO) all the way up. The red * indicates there was a very minor truncation at the top, which is completely acceptable in this size of wave.
The chart was updated today only to show that the down wave now exceeds the length of wave (iv), exceeds the length of wave (ii), and exceeds the length of wave (b) near the March low. While price has not yet exceeded the length of the (x) wave down, we have "turned a degree" in some manner and that must be respected. For those who are following degree closely, please demote each of the degrees of the diagonal one level so that it fits in with the daily count above.
Lastly, we are beginning to see the expected post-pattern behavior of a diagonal: a rapid drop out of the diagonal that should exceed the start of the diagonal in less time than the diagonal took to form. This is a four-hour chart, and there is a LOT of time for that to happen yet.
Have a very good start to your evening.
TraderJoe
P.S. Posted this chart for a questioning reader.
P.S. Posted this chart for a questioning reader.
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| S&P500 Cash Index - Daily - 2018 |
thanks again, Joe
ReplyDeleteJoe -
ReplyDeleteI posted a Neely chart (from a link of another participant here) recently, and commented that I found one particular aspect of interest (to me at least). I missed that you replied and asked what aspect. I noted it on the chart, so I am reposting the link. Sorry I missed your reply.
https://imgur.com/ENAsbEC
I have posted my 2018 chart as a post-script (see above) which allowed me to call the top within two daily bars. What part of 5 = 1 doesn't Neely like? Further, you will note only 105 daily candles for wave 5, the wave of interest, on the daily chart. I was watching it closely because, it is more ideal to have 120 - 160 candles to find that fourth wave. But the sharp fourth iv, alternates well with the running flat ii, and the diagonal is unquestioned. It was exceeded lower in less time than it took to form.
DeleteNo more on this topic.
TJ
One more to clarify:
ReplyDelete1. Posting his chart had nothing to do with your count back then, nor anyone else seeing a 5th wave up.
2. I simply found it interesting that the guy that writes the book can see that period as an abc. Just curious how HE could see 3 waves only.
He did say his confidence level was medium. Not sure if that relates to the price pattern only, or also the wave counts within, or what.
It was simply an observation. (rhetorical in nature). I'm sorry if you felt it was directed at you, it wasn't! If at anyone, it would be him.
So, agreed. No more on this topic. Sorry for the confusion.
Yes. You should ask those types of questions of him. I have said that I disagree strongly with all his newly added patterns - such as the 'neutral triangle' etc. They have done nothing but get him into a place that the average intelligence person simply can not understand.
DeleteWell, can't say that I understand either, so hopefully that elevates me to the average intelligence category! lol
Deletetacharts
ReplyDeleteill post some neely type charts and you can count. i think its based on frequency of sampling.
https://imgur.com/hMTu0YK
ReplyDeletehttps://imgur.com/wI5nDKR
now you can count with multiple time frames. dont forget to count the up move
and here are longer term
Deletehttps://imgur.com/5IBpxsY
1) added some trendlines
2) 3's are everywhere
3) 2018 top in january sure looks like a change in degree from that point on.
not making any counts just observations
the problem with neely charts is
ReplyDeleteif you have a time increment
with a low then high then lower low
you will only see the high and low
if the high is lower than the prior period low you have effectively lost a wave. the rally from the beginning low to high gets eliminated.
so its jatd enough to find 5 wave moves and by throwing out waves which are smaller you end up living in a world of 3s. thats why he has all the new patterns. its a major flaw. a better solution is to filter out waves that dont meet a threshold of retracement. but its a step back not forward to ise those charts without using new made up patterns because you will lose impulses. just a warning to anyone interested
..and funny that Neely should speak about 'missing waves' in his book. But it is not very clear exactly how that operates.
DeleteAm o missing something? Spx broke the 2018 ATH... So even if This current move since January is a B wave and we have a C wave coming... that still means new highs... I also noticed you stopped talking about SPX around the time it made a new ATH... Am I sniffing glue?? Just confused....
ReplyDeleteIF the Russell 2000 goes on to make a new high today, then it will likely be wave (iii) of it's ending diagonal. We got the short-term direction right, but price-wise it must be considered out of it's diagonal lower. The OPTION if a new high is not made today or Monday is just a triangle fourth wave.
ReplyDeletehttps://imgur.com/OPU1qR1
ReplyDeletethe red impulse on down on right becomes 3 waves with neely method of plotting highs and lows in order they occur
i have more to say and better implementation if there is interest
I see what you mean. I assume this was a 'case in point', and not a specific comment on the market.
Deleteyes. example.
DeleteRussell futures invalidated Joe's expanding diagonal idea?
ReplyDeleteI address that above, KS.
DeleteOh I see - I apologize Joe.
DeleteNo worries KS.
DeleteRE: @10:34 am, the Russell has gone over the top, and may be seen as wave (iii) of a contracting diagonal on the 4-hr chart. (Chart to follow).
ReplyDeleteHere is the Russell chart including the potential 4-hr diagonal.
Deletehttps://invst.ly/ap2ex
TJ
Thanks TJ,
DeleteYou remember the exp diagonal I showed on ES? Maybe it finished iv yesterday and currently in v?
Can you link to chart again, and will v take more time than iii ?
DeleteThe Russell futures are at currently at 1,613; beyond 1,618 a third wave of a contracting diagonal would be invalid. The futures are currently over their upper daily Bollinger Band.
DeleteHere is link, I have a hard time to count the internal waves to say the least so I don't know where to put the 2 and 4..
Deletehttps://imgur.com/YssUMRe
https://imgur.com/C1UtC9Y
Also here is an idea of a wxy on Russell futures:
Deletehttps://imgur.com/mTSaZT8
DOW?
Deletehttps://invst.ly/ap3w2
Thanks Joe for the updates on RUT. Thanks Eric for the proposed counts on the Russell and DOW. These WXY counts look very possible to me.
DeleteThis comment has been removed by the author.
ReplyDeleteWell? I guess start a new count.
ReplyDeleteA new post has been started for the next day.
ReplyDelete