Wednesday, July 24, 2019

Mixed Results

Today, the Dow was down while some other indexes made new all-time highs. As a result and considering all degree labels as best as possible this is the best count on the ES E-Mini S&P futures from the June 2nd low.

ES E-Mini S&P500 Futures - 4 Hr - Leading Diagonal Minute ((a)) and Now ((b))

The degree labels of interest are the down waves in mid-July. Each one is shorter than the down wave to the end of June. So, there are three waves down to a minuet (a) wave, and three waves up, so far, to the minuet (b) wave.

It was correct to call yesterday's up wave a five-wave diagonal move in the futures. It did turn out to be a leading diagonal instead of an ending diagonal. Nothing to be done about that .. that is the pure equivalency of various alternates: the same exact pattern can have two fundamentally opposite meanings in Elliott Wave theory - even if the wave itself is counted properly, which it was.

We showed the above count for the NQ (NASDAQ 100 futures) in the weekend video on July 14th. Today's higher high makes that count the more likely one for the ES, too. It is getting virtually pointless to count the cash market because the futures are making extremes that cash is not. But, even the futures are compressed at times like never seen. It would be nice to see a real, clear impulse wave. Maybe soon. Yes, the expectation from the above chart is that there would be a minuet (c) wave lower, to a minute ((b)) wave. However, there is no claim that such a wave is underway until the sub-minuette b wave of minuet (b) is exceeded lower.

Today's new high was made on another divergence of the oscillator.

Have a very good start to your evening.
TraderJoe

31 comments:

  1. But, I thought a leading diagonal can only appear as wave 1 of an impulse or wave A of a zigzag. Since with the higher high, we cannot be in a zigzag, then the diagonal must be wave 1 of an impulse. Is this correct? Also, wave (i) is disproportionately large compared to (iii), like almost 4 times bigger.

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    1. Hi Bob... leading diagonals are more likely A waves. Yes. I will be counting a zigzag, eventually, as ((a))-((b))-((c)). But, there certainly is no rule that says that ((b)) wave can't be a FLAT. So, that's what I'm counting. The (a) down is the three waves down of a FLAT. There should be three-waves up, likely to today, and then there should be five waves down to make the flat ((b)) wave. Then, ((c)) up to finish the zigzag.

      Let me know if something doesn't make sense. B waves can be "any three" including a smaller zigzag, a triangle, a flat or a combination. In short, they are real pains in the neck.

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    2. I understand now. Thank you for the explanation.

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  2. Thanks ET, very good job all this month. Nice analysis to understand this corrective environment.

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  3. Gold had a b wave triangle. Missed it waiting for an e wave cross on larger time frame.

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  4. Did the DJI cash just finish an E wave (low) of a triangle on intra-day chart past 10 days?

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  5. On the Euro Stoxx 50 and CAC today's drop was the longest price drop since the low in early June. Today's drop took less than 90 minutes. The previous longest price drop took around 11 trading days. IF this drop is going to be the longest in price AND time then the equity markets are going to be in correction mode for a little while longer yet. Seems to correlate with ET's count which puts ES in (c) of ((b)). Note that the ((b)) wave is correcting the move from 2730 to 3020.

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  6. After greater than 62% retrace, S&P 500 cash (and now ES futures) make a new lower low = follow-through of some type.

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    1. The lower low on the DOW/YM, should it hold, is 1.4 times the initial bounce (possible expanded wave?). For the SPX/ES it's 1.45.

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  7. Looks like I was right about the resistance at the upper trendline on the RUT!

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    1. RTY (RUT futures) made the 90% level in the overnight.

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  8. DAX has 3-3-5 potential off the Jul 3/Jul 4 top

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  9. There would need to be an upward overlap, and a marginal new lower low for a diagonal count in the ES, as below.

    https://invst.ly/bevrd

    TJ

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    1. If there is no upward overlap, then there is one way to count an impulse lower, with a flat second wave.

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    2. ET, iv of A of 1 is longer in price and time than B of 1. Is this kosher?

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    3. @Billy, yes. Degrees don't work 'backwards', only forwards.

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    4. @Billy .. also as mentioned above, if there is no upward overlap for the four wave of a diagonal, then the whole wave to 2 is the flat I noted. That is 'possible'.

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    5. Upward overlap is shown here. The only thing less than ideal is that wave 3 takes more 'time' than wave 1.

      https://invst.ly/bevw-

      TJ

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    6. SPX has three waves down, 3 > 1 and now overlap with 1.

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    7. SPX: maybe yesterday was wave 3, this is wave 4, a completed zigzag?

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    8. Hi TJ, in regards to Billy's question at 1.24pm, and your response being "Degrees don't work 'backwards', only forwards.", could please clarify that a little? Thanks

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    9. KS .. you can't 'time travel' backwards into the past. "B" waves are allowed to be as small as 1%, net change on their A waves. That's enough for now.

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  10. Up wave has now become 'too long' in price. Larger flat wave it is.

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    1. That would be in the futures. Cash now has a fourth wave that is 'longer in time' than the second wave. Perhaps an expanding diagonal in cash.

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  11. Yes 3 also bigger in price in cash

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  12. I don't grasp much about EW at all, but it's fair to say that ET provides a huge amount of help to all those who visit his blog. Good to see, I'm sure his book will be very much in demand too.

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  13. A new post has been started for the next day.

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