Tuesday, July 2, 2019

Nearing the High

Yesterday, our post included the possibility of a fourth wave triangle to better equalize the time spent in a fourth wave with the time spent in a second wave. Today's trading broke outside the channel and did create a triangle as shown on the continuing chart, below.

ES E-Mini S&P500 Futures - 30 Minutes - Triangle & Thrust

We counted out this triangle live and in almost real time for readers here. It is not our intent to do that often, but we wanted you to see how The Eight Fold Path Method can help predict the path of a potential impulse wave. Besides better equalizing the time between waves two & four, the triangle also helps provide alternation. Notice that the running wave (ii) has its b wave over the high of wave (i). The triangle with it's lower b wave than wave (iii) is the reason that a triangle was a good alternate for the fourth wave.

A further purpose of the triangle is to take up more time than wave (iii). And this it does, as well.

You will also note that as a cross-check, the EMA-34 shows that every significant numbered wave in the impulse - as well as the significant lettered waves in the triangle - are on an opposite side of the average which provides excellent form and balance. Notice, too, that the triangle brings the final reading of the Elliott Wave Oscillator for the fourth wave much closer to the zero mark than does that first a wave of the triangle.

At the end of the day (actually after the close of the cash session), the futures popped, and are likely providing that fifth wave. As such, wave (v) is bumping up against the underside of that channel. Does the market know that channel is there? Prices keep on being drawn to it at (i), (ii), (iii), a, b and (v). The triangle was largely expected as 'consolidation' after the first-of-the-month, and first-of-the-quarter inflows, news on trade talks and the lighter holiday volume.

At the end of the day, wave (v) is well beyond a 78% retracement - the minimum needed to claim a truncation - so even if we never see higher prices, the wave will be counted as a fifth wave.

There is another brief alternate, and that is that prices form another type of triangle from the same set of waves - and that is a "barrier triangle". This is not required, but it could happen. For that to occur, then the cash price should attempt to bang into a horizontal line drawn from wave (iii) a couple of times before popping the high. This could happen, we'll watch for it.

Have a good start to your evening.
TraderJoe

43 comments:

  1. seems like a top is being called or expected every few weeks

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    1. True. But the OBJECTIVITY of the analysis is undeniable imho.

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    2. The Dow topped in Oct. Nine months now! Will it move to new highs?

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    3. objectively there is also always close to equal prob count thats more bullish just joe doesnt publish it

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    4. meaning do your own work. joe is here to teach. i give him high marks

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    5. Absolutely. Many are too lazy to put out the effort, and just want some trading guru to do the heavy lifting for them.

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  2. Just for fun, here is a count for TLRY. I believe I have followed all of Joe's rules. I have wave 4 done and wave 5 to go below 34.25. From a high of 300.00!!

    https://imgur.com/ccSLzoJ

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    1. Hi Bob .. not to quibble but you haven't followed all of the rules. In fact, you missed fully four of them. 1) The first is that except in a diagonal, all of wave "three" must be below the 0 - 2 trend line. Your count doesn't do that. The problem is you missed that B is a "running triangle". When you do that, then the next wave down becomes wave 1, and then wave 3 will fit below the trend line. 2) There is no reference to putting 120 - 140 candles on the chart. The chart shows 197. 3) There is no reference to the Elliott Wave Oscillator as a counting tool, and 4) there is no measurement of a Fibonacci extension.

      At least these things can not be seen on the chart. So, overall grade is D-, "just for fun", of course.

      TJ

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    2. like i said good teacher. no . great

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    3. Well, I don't have your tools and I guess I don't know your rules. But I just don't see a "running triangle". But now I see an ABC-X-AB which puts the first wave of C of Y starting at the 106 high. Then a 0-2 trend line is over wave 3. Thanks for the feedback.

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    4. Outstanding training as always, Joe.

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  3. S&P500 cash is now 'over the high', proving out the triangle.

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    1. Correct me if I am wrong Joe, but it looks like price in the SP500 cash index has hit exactly the 100% extension of the width of the triangle from which price broke out from and has stalled. Is my measurement correct? Thanks

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    2. @Mark .. see below at 11:30 AM. TJ.

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  4. To me wave (v) in ES future now looks like an endig diagonal , where subwaves ((i)) > ((iii)) > ((v)) in value and time.

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  5. If alternation plays out, then this should be the last wave within the fifth wave up, or 'five-of-five'.

    https://invst.ly/b61ka

    TJ

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    Replies
    1. ..there's a new high; alternation plays out.

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    2. here's the updated chart ...

      https://invst.ly/b61lm

      TJ

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    3. Looking at the 1 day the S&P in both futures and cash are hitting the upper bollinger bands.

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    4. Five up out of triangle. Unless we get an extended fifth, that should be all she wrote!

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    5. @Tach .. by measurement wave five in the ES is the longest wave in the sequence, x5.

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    6. Yes indeed! In striking contrast to the cash session.
      I don't think I have ever seen anything like that previously!

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  6. As far as I can tell, a change of 'degree' would occur below 2,993.00 basis ES futures.

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    Replies
    1. .. there is the 'possibility' of a small E-D at today's high, so far.

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    2. ..nope .. E-D invalidated by a higher high.. so that was likely the "b" wave of a fourth wave, with a small 'c' wave down, and now into a fifth wave up.

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  7. Dow breaks to new ATH just in time for the fourth of July celebration; this is getting so obvious...

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    1. The market (100% probability currently) is also expecting the Fed to cut rates in 4 weeks: https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

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  8. Joe, do you have any intention of publishng a count on any equity index since december low with an upward count as an impulse?

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  9. Some interesting ST Gann confluence areas

    https://www.tradingview.com/x/w3mdnKQ9/

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  10. Ummm. I’m thinking this site needs a more bullish count. We need to keep in mind that EW has been mostly on the wrong side of this move from December. There is good reason to believe the market is going higher
    Don’t fight the Fed.

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    1. I'm going to let a comment like this stand 'one more time'. You post no work of your own. You show no charts. You provide no effort. You certainly know how to criticize 'something' - I don't know what. Further opinionated platitudes without a basis in wave counting will be spammed - just like many others.

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  11. I think this up move is done provided there is no more waves pending to the upside? Otherwise this is something else maybe. Note how the first two resistances confirm that long wave up as single wave (abc more than 5). Then second down. Third up again hits two resistance levels. If third is different degree owing to smaller size and proportion compared to first then this could go higher?

    ES Chart

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  12. Based on the pnf, target for spx is 3100. Some people count this advance as 1-2,1-2 with last Wednesday being 3 of 3. Not sure how to fit internal waves, but sure enough Wednesday did feel indeed like we are in wave 3. Based on the T time measurement, yesterday was suppose to be a turn day. Looks like it might have flipped to the upside. If that is the case, then based on Mr Ts rules, high will happen in August/at latest 1st week of September and low in November.
    Have a happy 4th everyone. Joe thank you for providing your views free of charge.

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    1. https://twitter.com/coolbizone/status/1146153553360146432/photo/1?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1146153553360146432&ref_url=https%3A%2F%2Fcaldaro.wordpress.com%2F2019%2F06%2F29%2Fweekend-report-11%2Fcomment-page-5%2F%23comments

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  13. joe what did you mean when u said this is getting so obvious

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    1. The odds of being at the highest high ever on the Dow, the exact day when 'someone' might want to make a self-serving speech about it are, by random chance astronomically low unless there was clear manipulation (Fed, Xchanges, or PPT) to get it there.

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

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