First Day of Month, First Day of New Quarter

As you might have been able to read in some of the comments, particularly from the previous post, some people spend a lot of time and energy on news-related and, often, opinion-related matters. We try to keep life much more simple. Below are two charts. The first one is of the ES E-Mini S&P500 futures.

ES E-Mini S&P500 Futures - 15 Min - In a Channel

Up until late Friday, prices were strictly trading in a channel. It was very sloppy price movement which is typical of the "end of month window-dressing" we have so often written about. There are several ways to try to count this wave - some of which are even valid. We have just shown the simplest way. It is that of a "running b / ii" wave. At the end of the day (meaning 4 PM CDT), prices none-the-less put on a 14 point premium to cash - ending the futures session at 2,955 versus 2,941 for cash! This moved the premium from the typical 5 - 8 points to the whopping 14 points!

Somehow the "Smart Money" - those with account sizes large enough to move markets - wanted to front-run either the trade announcement, or the typical "beginning of the month / quarter inflows" we have often written about.

But, our job is simple. It is not to care about the news; rather it is to measure. Right now we have either the c = a, or iii = i. It would be difficult to say until or unless price breaks below the channel again. The channel could be part or all of a "bear flag". It could be a "base channel" for a new up move. If one is neutral, calm and patient, then one primarily measures. Does any extension of the up move get past the 1.27 mark? how about the 1.618 mark (both of which are shown above)?

In addition to measuring, one can also compare. Here is a chart of the NASDAQ 100 futures (NQ).

NASDAQ 100 (NQ) Futures - 15 Minutes - Likely Triangle

Here you can see there is very likely a triangle in the structure. In fact, we were trying to count a possible triangle in the ES late in the day, but it ended as a "running flat" and never properly finished the triangle structure. And one can ask more relevant questions of the market structure, like "if tech is leading this market, why does the NQ have a lower daily high than the ES"? Notice it has definitely a higher low at the bottom. And if we are going to impulse up, then perhaps this is just a "running ii / b" wave also. None-the-less, the Elliott Wave Oscillator in this index is a  flat as a pancake.

Have a good rest of the weekend.

TraderJoe

P.S. The chart below is updated for the large upward move in the futures tonight, presuming it holds until morning. (That is an assumption).

ES E-Mini S&P500 Futures - 120 Minute - Revision to Minute ((a))

 

The above count only revises the minute ((a)) wave to be a diagonal, and then the largest wave down must be of the same degree as ((a)) because it is larger and possibly longer than all other down waves.