Today we monitored to see if a larger degree fourth wave would form - perhaps as a triangle. We said that ES 2,795 was the limit for the move, because that is where a c wave would equal 1.618 x a in a triangle. And when 2,796 was reached, we said that if a speedy decline did not begin immediately, we must consider the up move as part of an impulse instead of a triangle.
Such a decline did not emerge, and so the waves over 2,795 are most likely part of a b wave of a flat for the fourth wave of an impulse higher.
That's how Elliott Wave logic works, and so we accept it. From the longer term count standpoint, that means we have only had an A-B-C downward move, as follows.
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| ES E-Mini S&P500 Futures - 4 HR - The 1-2-3 Became A-B-C |
Although the C wave is marginally longer than the A wave, it counts best as C = A, and the 4-hr EWO is on a divergence at the lows. The blue fourth wave (iv) shorter in time than the second wave (ii) is what initially threw the downward impulse off in terms of 'time', and hence, that peak is relabeled for the C wave.
I'll be working on what this means for the longer term picture in the next couple of days. For now, we have to see if a fourth wave and fifth wave of the upward impulse develops properly tomorrow. IF so, then there should be at least another five waves upward. Perhaps more, but at least one more set of five-waves up.
Have a good start to the evening.
TraderJoe
Thanks Joe. And thanks for bringing the longer term back into the discussion.
ReplyDeleteThanks!
ReplyDeleteHere is the triangle that might make it possible to count abc on cash also:
https://invst.ly/ayo07
very small D and E wave but dunno how to sync cash and futures otherwise
DeleteThe DOW is different to the other indices in that the now supposed "c wave" down is shorter than the "a wave". In the DOW "a x 0.91 = c".
ReplyDeleteTJ please take a look at this, it meets time and price degree, but we need to draw a new trendline 2-4 I believe:
ReplyDeletehttps://invst.ly/ayoa0
Thought of that already but it needs 1) to complete the first impulse up, 2) complete a retrace, then 3) complete the second impulse up, and 4) then fail. We are long way away from that yet. But it is my leading candidate for a down move, as it might be able to be counted as 5:3:5:3:5.
Delete..and it won't work in the DOW.
Deleteyes..at least this count have a clear invalidation level, if correct because of todays potential impulse A was very fast we need a vey slow B and C so 4 becomes bigger in time than 2,
DeleteET can a 3rd be a diagonal without the 1st and 5th being diagonals?
Deleteyes dow is a problem..but works in ndx and spx so maybe tech heavy spx and ndx will diverge from DOW during escalating trade war as you have mentioned before, also if we start to see signs of an earnings contraction/recession we might get the biggest divergence in many years..in many PMIs around the world we have seen a rise in the input price component last couple months which should ad pressure to margins coming quarters
Deleteinpulse down still alive in ndx for now
ReplyDeletejoe 3 questions about longer term
ReplyDeletewith your wave degrees
on long term
do you compare absolute or percentage change (log)
is there any way the count begins later then the march 09 low ie bear market did not end at price low
using log prices it almost measures that 2016 to 2018 top is 1 of extended 5th and December 2018 could be 2 of extended fifth. i believe the wave 1 takes too much time but rest shoild work.
thanks
Marc, I'm glad you brought up the longer term discussion, here's a chart on NDX, what do you think?
ReplyDeleteMost EWs I have seen goes with the bullish 1-2-i-ii, Imho I think the 3rd "solution" is the most likely.
https://invst.ly/aysq3
Marc even with log prices the Dec decline is bigger than any correction since 09 preventing ext 5th or ending diagonal 5th (primary 2 (2010-2011) likely a running flat? net distance shorter than Dec decline)
DeleteGold has the look of burst out of weekly triangle. Difficult because never closed under 34 on the weekly and was really shallow retrace. That can happen. Off the bottom there was a abc with a nice triangle in there, so its been hard to count.
ReplyDeleteThe e wave could have been a zzz, notice how it lost downward momo in the channel.
ReplyDelete... and the x'S would have alternation
Delete"Seems" like 5 waves up complete. Wave 1 & 3 relationship on the ES and DAX futures were 2.618 & 1.618 respectively. YM and RUT futures were over 2.0 and NQ nearly 4.0. Satisfactory wave 4 signatures in all cases. I say "seems" like 5 waves up complete and conventional wisdom would therefore expect a pullback and then a higher high. But take nothing for granted in this market.
ReplyDeleteI should say that with the rally in futures to the 2825 area ES has created quite a symmetrical H&S pattern, certainly better than the YM, now with a lower neck line at 2728. The measured move now drops down to 2495 on this pattern should it play out. I'm not holding my breath on this playing but there it is.
DeletePerhaps 5 up is not complete. Could be trying to triangle in a 4th wave on some indices whilst playing out an expanded flat on others. If so could finish on the highs of the day.
ReplyDeleteA triangle fourth wave in futures is one possibility. It has formed properly so far; if it breaks down, then a flat.
ReplyDeletehttps://invst.ly/ayvzc
TJ
Thanks TJ, do you have an alternative count in which we go to ATH?
DeletePotential Triangle broke.
DeleteI'm pretty sure cash can be counted as this extended first wave count. It might be an 'a' wave up, and now in a 'b' wave that can have almost any form.
ReplyDeletehttps://invst.ly/aywr4
TJ
Your higher degree 4 while more in time is not more in price.
DeleteDaily CL riding the lower bb with embedded slow stoch and 18ma about to cross below the 100ma. https://invst.ly/ayx1p
ReplyDeleteDaily S&P500 has returned to the 18ma and is beginning to relieve the oversold condition. https://invst.ly/ayx4p
ReplyDeleteFutures seem to be a bit prettier than cash. YM at the high was 1.618 extension (miscalculated earlier). That would suggest either an a-b-c for the whole move or a 4th still in progress. If its a triangle it's looks rather small relative small compared to wave 2. Nevertheless it would be in "c wave" if it was targeting around 25400. Otherwise we have a very complex start to a larger degree "b wave".
ReplyDeleteThere is some weakness in oil stocks such as COP, MRO, EOG. There was also some strong weakness in random stocks like BABA and LVS, but the selling has dissipated.
ReplyDeleteUnfortunately for bears, it appears to be a decent reversal to the upside so far this week.
Cash S&P has gone over the top, marginally. Suggests that the B wave might be a Flat.
ReplyDeleteNot quite on the ES or YM but over 90%. Yes, I've been thinking the same thing. What is noticeable is how little has been given back considering we're nearly up 100 ES handles. Major squeeze. A "c wave" down looks in order but do we continue to squeeze up directly to 2835-40? That is the question.
DeleteS&P 500 cash 18 day ma is currently at 2823 and the 18 week ma is at 2833.
ReplyDeleteYM now over the top.
ReplyDeleteMechanics of the squeeze? Cumulative short hedges (futures/options) hit an all-time high last week. Kapow!! … 900 DOW points.
ReplyDeleteOne more higher high for contracting diagonal.
ReplyDeletetoo much time has occurred in would have been 4
DeleteA new post has been started for the next day.
ReplyDelete