Saturday, May 4, 2019

Waiting for (B) to Wrap

Please notice the degree labeling comments. We're doing our best to be extremely consistent, and the labeling notations help explain how.

S&P500 Cash Index - Monthly - Degrees

The size of the current moves - both downward into December 2018, and upward to the present helps explain why I think we are in a larger degree move, and not the smaller one as so many other Elliott analysts think. Many have gone back and changed labels since the 2009 bottom, and created other degree violations in the process. I have not.

The third waves, (3) and 3, grow by extension, and are denoted with an x or x. And (5) is just shorter than (3), preserving the comment that wave (3) is the extended wave in the series. It is OK for (B) to be the same size or larger than (1), (2), (4), or (A) because they are of the same degree.

Have a good start to the weekend.
TraderJoe

P.S. In the spirit of the craft of wave analysis, I have again written to a major Elliott Wave service informing them of their likely incorrect count.

Posted by at

51 comments:

  1. Mark ThimeschMay 4, 2019 at 8:33 AM

    Thanks, Joe!
    I'm FINALLY starting to get my head around the "degree" issue.
    Really appreciate it.

    ReplyDelete
  2. JoeMMay 4, 2019 at 9:53 AM

    The chart implies a massive bull market throughout most of the next decade, do I understand?

    ReplyDelete
    Replies
    1. Elliott_TraderMay 4, 2019 at 12:02 PM

      I have no idea how you get that.

      Delete
    2. JoeMMay 4, 2019 at 3:02 PM

      From 2009, there is 1-2-3-4-5-A-B (near completion, brackets on all). Does that not imply another multi-year impulse up after the correction is completed?

      Like others here, I am trying to make sense of the long term projection. Thanks.

      Delete
    3. Elliott_TraderMay 4, 2019 at 4:42 PM

      I'm not yet trying to provide the long term projection you are looking for.

      Delete
  3. kobajashiMay 4, 2019 at 10:17 AM

    Hello Joe

    Am i correct to state you see the oktober 2018 top as a primary 1 top. The december low as Intermediate A, and this as the B wave of a primary second wave, with the C wave next to end this primary 2 with after this a primary 3 bull?
    This could be a hell of a ride then.

    Thank you

    Koba

    ReplyDelete
  4. tachartsMay 4, 2019 at 12:04 PM

    Joe -
    Thanks for finally posting your longer term SPX updated chart! Two questions come to mind:

    1. What extension level (area) of your (A) would need to be reached by (B) to go from regular flat to an expanded? Obviously, this could have a material impact on how far down (C) might be expected to go.

    2. In your earlier scenario (bear market), while I don't know for sure, it seemed you were looking for a zigzag type of correction (where (A) might retace about .618 of wave (5), and (C) reaching/exceeding (4)). In our current anticipated flat, it could well be that (C) doesn't reach (A) or just does. This would be a significant difference in the overall correction.
    Does this possibility suggest that perhaps the higher degree label at (5) might now be different in any way due to the potentially shallower correction?

    Thanks again for posting this chart!

    ReplyDelete
    Replies
    1. Elliott_TraderMay 4, 2019 at 12:20 PM

      @ta .. welcome and good questions, some of which I chose not to answer more fully at this time.

      Regarding Question 1...

      The common and usual requirement for the (B) wave of an expanded flat is 105% or more. But, the expanded flat is not the only type of flat that can have a deep correction (there are many other types of flats and or flat combinations, and I chose not to go into them in this brief reply).

      Regarding Question 2...

      No. The assumption is incorrect. The only difference in the down count is I was looking for an initial five-waves down, and there were only three, using the rules of wave construction and wave degree as I understand them. That is the only difference, as I have said before.

      TJ

      Delete
  5. RygbsurgnMay 4, 2019 at 12:36 PM

    Joe, thanks for the update. If a B wave in a corrective wave makes new highs, does that imply that after the correction is complete with a C wave that there will be an impulse wave to new highs? Thanks Sam

    ReplyDelete
    Replies
    1. Elliott_TraderMay 4, 2019 at 12:42 PM

      No. Fourth waves can be complex, intractable affairs. See above replies.

      Delete
  6. jwtx12May 4, 2019 at 12:59 PM

    Joe, general question here if you have time.

    One of the more difficult aspects of counting for me as a rookie is the possibility of truncated 5ths AND B waves that make new highs (to keep it simple, I'm just going to write this as if the impulse is up). I'm trying to rule out possibilities in patterns where I can't count the internal structure of the sub-waves.

    Say, for example, you have (1) and 5-(1) truncated. Is it possible/likely that in the structure of (2) that

    B-(2) will exceed 5-(1)?
    B-(2) will exceed 3-(1)?

    I guess a simpler form of the question is when the 5th wave truncates, is it possible/likely that the ensuing correction will be of an expanded/running variety?

    ReplyDelete
    Replies
    1. Elliott_TraderMay 4, 2019 at 4:01 PM

      The two are unrelated. Higher B waves are usually 'news' driven - like the FED's recent policy reversal. Truncations usually are the result of the 'Big Money' or 'Smart Money' reaching profit targets like upper daily Bollinger Bands, where unsuspecting retail is still looking for that fifth wave.

      Delete
    2. jwtx12May 4, 2019 at 5:45 PM

      thanks!

      Delete
  7. JoeMMay 4, 2019 at 3:02 PM

    This comment has been removed by the author.

    ReplyDelete
  8. Tom27May 4, 2019 at 3:27 PM

    Hi Joe, one question regarding above count. Should we not expect to have an alternation between (2) and (4)? Both look like some kid of flat corrections? Thank you.

    ReplyDelete
    Replies
    1. Elliott_TraderMay 4, 2019 at 5:03 PM

      What? The B wave of (2) went 'well' over the top. The X wave of Y never even came close to a higher high - something I called in advance. The Y wave of (4) made a lower low. The C wave of (2) never made a lower low. Loads of alternation - but you may not have been following it at the time.

      Delete
    2. Tom27May 5, 2019 at 10:40 PM

      thank you for taking your time to reply to my comment. I was merely expecting either a zig-zag or a triangle in the 4th wave. I thought if a wave retraces more then 61.8% of it cannot be part of a zigzag, but rather it is a flat. I might be wrong. Thank you for a nice chart.

      Delete
    3. Elliott_TraderMay 6, 2019 at 8:07 AM

      @Tom; that is one of Neely's claims (the flat above 62%) that I can not substantiate, and which is not part of the 'rules' for flats in The Elliott Wave Principle by Frost & Prechter.

      Delete
    4. Tom27May 7, 2019 at 9:24 PM

      Thank you! I knew I saw it somewhere and have used it few times. I will take a look again at the Elliott Wave book.

      Delete
  9. TjchuckMay 4, 2019 at 4:29 PM

    Joe,

    I have just a couple of questions to help understand.

    1) Why does (A) not break the bottom green 0 to 2 trend line to indicate a degree change....are we waiting for the (C) wave down to date that? I just don’t remember where you stand on that guideline....hence guideline?

    2) Since (B) is much larger than B for wave (2) does it matter if (B) is shorter in time? Or does price supersede that?

    Thanks for all of this work
    Tim

    ReplyDelete
    Replies
    1. Elliott_TraderMay 4, 2019 at 5:04 PM

      1) The (A) wave broke the trend line of the (4) to (5) two-year wave. Or did people forget already?

      2) The (B) wave is, first, longer in time than the prior B wave, and longer in price than it. Second the (B) wave is longer in time than the (A) wave and took longer to reach the prior high. Third, we do not know the (B) wave is over yet.

      Delete
    2. TjchuckMay 4, 2019 at 7:58 PM

      Joe,

      Yep I forgot already... You rock...patience is key to EWO and that is what I need to learn the most thanks for responding.

      Tim

      Delete
  10. sammyMay 4, 2019 at 4:39 PM

    TJ

    My high dates of 4-29/30 look good for the DJI and SPX. Looking at the harmonics of the Naz indexes (They are different) See a high on Mon, Tues for them....then the decline should start in earnest. New highs in the SPX next week likely means the cycle high at the end of Apr gets trampled. If I'm right Monday opens lower and down we go.

    ReplyDelete
    Replies
    1. Elliott_TraderMay 4, 2019 at 5:00 PM

      What does it mean for a cycle to get 'trampled'? In any case, I'll be watching.

      Delete
  11. marcMay 4, 2019 at 5:10 PM

    thanks joe
    no surprises
    looks good

    ReplyDelete
  12. pbeckMay 4, 2019 at 7:42 PM

    Thanks Joe as always.

    I am going to try to go back and look but I think the old videos (several years back - maybe even before this blog) were lost. I was almost sure that there was some issue (degree - ?, again, I will see if I have any notes) with labeling that expanded flat back in 2010 / 2011. I thought you had labeled that the first wave at the 2011 high.

    I could be wrong, it was a long time ago and I am going from memory.

    ReplyDelete
    Replies
    1. pbeckMay 5, 2019 at 7:09 PM

      TJ, I apologize. Looking back through my notes, I was thinking of the start of the 2016 rally (5) not the start of the rally in 2009. The discussion was if and why the start of the 2016 was not also an expanded flat.

      Thanks

      Delete
  13. sammyMay 4, 2019 at 8:43 PM

    Trampled, busted....eliminated.....overcome

    ReplyDelete
  14. noviceMay 5, 2019 at 3:00 AM

    Re pbeck @ 7.42pm

    Joe, could the B/(2) in 2011 possibly be 1 instead (small 4th wave) and (3) 2009/2105 be (1) i.e. (3)-(4)-(5)-A becomes (1)-(2)-(3)-(4) and now in (5)?
    I accept the 0-2 trendline violations since Dec 2018 argue against the (5) labelling.

    ReplyDelete
    Replies
    1. Elliott_TraderMay 5, 2019 at 7:35 AM

      No. You're getting your degrees all confused. Then (1) - which means Intermediate 1, becomes longer than 1 - which means minor 1. And, even if you get the degrees right, then the second 1 is LONGER than the first 1 - which is a degree violation. You are saying the sub-wave 1 is longer than a larger degree wave 1.

      Delete
  15. Bob_JohnsonMay 5, 2019 at 1:43 PM

    Joe, I don't understand why you used a chart of monthly closes? Why not a normal candlestick chart showing price extremes? Then Y is clearly lower than W.

    From your chart, I have the following measurements:
    (0)=666.79
    (1)=1219.80 +553.01
    (2)=1074.77 -145.03
    (3)=2134.72 +1059.95
    (4)=1810.10 -324.62
    (5)=2940.91 +1130.81

    So (5) is greater than (3). What do I have wrong? It would REALLY be nice if you could post your measurements. Thanks.

    ReplyDelete
    Replies
    1. Elliott_TraderMay 5, 2019 at 5:59 PM

      Elliott told us when comparing waves over very long time scales to use log charting and percentage moves. Using your figures...

      (3) = 98.6% rise in 3+ years
      (5) = 62.5% rise in 2+ years.

      Since the percentage rise is smaller in percent and shorter in years, then the third wave extension is still perfectly valid. That is, if you plotted the wave on an OHLC "log" chart, wave (3) would also still 'look' much longer than (5), so I stand by the analysis.

      Again, it is shorter in log price and shorter in 'time'. Usually, most often, the extended wave will also be longer in 'time'. Wave (5) just is not.

      I chose the close-only monthly chart for the visual cleanness of showing the relative waves. Not for any other reason.

      TJ

      Delete
  16. Erik BMay 5, 2019 at 4:37 PM

    Any update on the expanded diagonal on eur/usd?
    Bottom could be in but c could also form an diagonal? or maybe b of v formed a running flat and c started at 1.1265?

    ReplyDelete
    Replies
    1. MatteoMay 6, 2019 at 5:11 AM

      Hi Erik, I think the expanded diagonal has already ended as showed in the ET chart previously. I personally expect a 5 waves upward movement from now as a C wave of a larger degree, where A started on 08/15/2018 and B started on 09/24/2018

      Delete
    2. Elliott_TraderMay 6, 2019 at 8:10 AM

      @Erik, as of this time, price has not gone over the May 3 high. If it does, it might still be a (b) wave up, with a (c) wave down. The higher (b) wave, if it occurs, might help signal the direction of the short term trend.

      Delete
    3. Elliott_TraderMay 6, 2019 at 8:51 AM

      @Erik, a higher (b) wave was not made as of this time, but a near equal low to the 5/5 low. So, with a lower (b) wave of a flat or zigzag, if there is a following five-waves-up I would expect it to be of 'normal' strength, not the greater strength due to higher (b) waves.

      Delete
    4. Elliott_TraderMay 6, 2019 at 1:51 PM

      @Erik - a potential higher (b) wave, or part of a next wave up as been made as of this time. Nothing says a C wave down couldn't happen yet.

      Delete
    5. Erik BMay 6, 2019 at 2:13 PM

      Yes let’s see if move from 1.1135 becomes a zigzag or impulse

      Delete
  17. Elliott_TraderMay 5, 2019 at 9:05 PM

    I guess no one cares the ES futures are currently down more than -60 points, apparently on tariff-related news.

    ReplyDelete
    Replies
    1. Elliott_TraderMay 5, 2019 at 9:08 PM

      The down wave in the 4-Hr DOW futures is now longer than wave (ii) of the diagonal shown for days now, and therefore, there is likely a degree turn.

      Delete
    2. C-DocMay 5, 2019 at 9:50 PM

      I care about the ES futures TJ...Looks like waiting for (B) to wrap up may be sooner than anticipated...

      Delete
  18. marcMay 5, 2019 at 9:20 PM

    yep u right mr joe

    ReplyDelete
  19. Pittsburgh TomMay 5, 2019 at 10:23 PM

    The candlestick signals on the daily charts so far of the Dow futures and the s&p futures are called kicker signals. They demonstrate not just a change in sentiment but a dramatic change. If these signals are held through tomorrow's cash session it should mean a significant continuing downward move.

    ReplyDelete
    Replies
    1. Elliott_TraderMay 6, 2019 at 7:36 AM

      Yes, valid kicker in the ES, and YM. Not so much in the Russell and the NQ - as the opens are not similar in those two indexes. There is a requirement for roughly equal opens.

      https://stephenbigalow.com/blog/kicker-signals/

      TJ

      Delete
  20. marcMay 5, 2019 at 11:09 PM

    thanks PT

    ReplyDelete
    Replies
    1. Elliott_TraderMay 6, 2019 at 7:37 AM

      marc .. 'please' use the reply button to respond to an individual's post.

      Delete
  21. Elliott_TraderMay 6, 2019 at 5:03 PM

    There is a new post started for the next day.

    ReplyDelete
  22. mark poplinMay 6, 2019 at 5:18 PM

    Does the major Elliot service you are referring to, ever respond or make adjustments? Just curious Thanks for your blog it has been a big help for me,Mark

    ReplyDelete

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