Saturday, August 3, 2019

Hourly ES

This is the second post this weekend. If you haven't read the first one, you are encouraged to read it now. Below is a chart of the hourly ES E-Mini SP500 Futures. The first thing you will note is that at this time, there are at least 120 candles on the chart for the "wave of interest" - along with the Elliott Wave Oscillator. 

ES - Hourly - Larger Diagonal

Given the usual techniques of The Eight Fold Path Methodology, the pattern seen from the high is very typical of the expanding diagonal. The EWO on wave (ii) just peaks above the zero line, and the EWO on wave (iv) is ever so slightly higher than that of wave (ii). This signature has happened over and over again in my experience. The adherence to trend lines is still outstanding.

Further, I would be remiss if I did not see wave (iii) on the low of the EWO - which it is where indicated at this point. Wave b in a diagonal can be a flat, a zigzag or a triangle. So far, it is a flat. That 'could' mean that we have waves .i, down, and .ii, up of c of (v) or it could mean than wave b will continue for a while in the after hours. It needs to be watched closely, but the diagonal could still finish with a lower low against the daily up trend line at the 100-day SMA.

The very, very interesting thing again is that the last b wave on the chart was a "pre-market" wave occurring after the payroll employment report. It never even shows up in the cash market, but may be important to an understanding of wave structure at this time.  The good news is, if the b wave is over, then the count may be straight-forward to the low. The bad news is that almost nothing invalidates a b wave higher, unless it were to travel over the high of wave (iv). Traveling below the low of Friday means the b wave is likely over.

Since the diagonal currently has the structure of 3-3-3-3-3 it has a fairly high probability of being an ending rather than a leading diagonal.

Have a good rest of the weekend.
TraderJoe

P.S. Please see C's comment around 1:09 PM, below. I completely missed that (iv) did not overlap (i). That is my error, and my apologies. I said I would always let you know when I was incorrect. That mean's with C's, help, and Erik's comments regarding degree's, that the Flat-X-Zigzag I mentioned in previous comments is, in fact, the more likely pattern. Here it is, sketched out.

https://invst.ly/bhznp

Thanks & my apologies.

22 comments:

  1. Hope u have a great weekend!
    Both ”a” and ”c” of 3 is bigger in price than 1, and ”b” of 3 is bigger than all of 2 in time and price, why did you change the terminal location of the expanded diagonal at 3?

    Also I find the location for Russell 2000 quite worrisome for the rest of the markets. I can’t find a bullish count sence it broke it’s trendline. If you do have the time before futures open it would be very helpfull if you could take a look at R2000 during the weekend.

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    1. https://imgur.com/uvrLVz1

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    2. Hi Erik .. thanks and you, as well. I said in the comments that an 'exactly' equivalent structure is a FLAT-X-ZIGZAG. I was hoping someone would raise the "degree labeling issue", so that I could make it more clear. Here is the second way of labeling exactly the same wave.

      https://invst.ly/bhznp

      But the trend lines are not as nice, and the structure is a bit more complicated for people to understand. I'm OK with either. They project similar things. As a minute ((b)) wave lower it can definitely have the structure of a flat-x-zigzag. B waves can be complex, too. Any three!

      From the stand point of trend lines, and EWO the rationale for the chart above looks ok. I wonder if we'll find out if some of the megaphone patterns people find are really flat-x-zigzag?

      Thanks for asking.

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    3. Yes maybe there are more complex corrections than we think..
      And this potential flat-x-zz shows up in both cash and ES which is great?
      And who knows if the market had decided that the correction was finished after fed? But the Trump tweet caused the first impulse up to fail so we call it x instead, it had already retraced 76.4 up and had most likely a fifth wave to go.

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    4. Please see C's comment at 1:09 pm. Makes this a Flat-X-Zigzag, almost for sure.

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    5. @eRik .. regarding the Russell, from what I can see the RTY futures have not broken their weekly up trend line. Do you agree?

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  2. How would that pattern fit in with the bigger picture?

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    1. (c) of minute ((b)) of Y, with minute ((c)) of Y up to follows.

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  3. Note (iv) 3014.25 doesn't overlap (i) 3015.50.

    I'm still with the July 31 count, with an expanding DT ending at (iii) above. Also I'm wondering how much power we can give to the Trump tweet. Can it truncate the entirety of Y, I wonder.

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    1. Ah! Thanks for that! I completely missed it! Then, Flat-X-Zigzag it is!

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    2. ET, could you kindly update your main chart above with the correct count so that anyone who doesn't bother reading these comments doesn't get the wrong idea?

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    3. @KS, please see the next video update.

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  4. ET any reason why c of (v) could not have concluded at Friday's low? How do you conclude that b & c of (v) may still be playing out when Friday's low was a good trendline terminus for (v) in an ED? Thanks.

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    Replies
    1. It's not hard and fast, but it 1) missed the weekly uptrend line from Dec 24th. 2) has not hit the 100-day SMA yet.

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  5. can W be 1 and X be 2 if we extend much lower?

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    1. The unknown account is not replied to. Please log in.

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  6. IF we would break down with a daily close below the dec 24 trendline on monday or tuesday maybe this is the correct count. (B) is the biggest decline on the chart up to (C) so I believe it works?!

    https://invst.ly/bi144

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    1. I've looked at that multiple times, and it is possible to give Y = 0.618 x W; which is an excellent ratio. But it 'can' extend to Y = W. Also, you have to move the 4, one peak to the left. But, it 'does' work. And then, the down count has to become a little better second wave. So, it has to be given 50-50 odds with further up movement - primarily because of sentiment, and we don't have any information on any reaction yet to the weekly up trend line.

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    2. Yes sentiment is already very stretched here..
      Also the down leg on 19/7 is deeper on futures than cash index, which causes a degree violation with the potential (B) wave not being the biggest decline on futures..hm

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  7. hi Joe, any chance the entire 3029/2914 is an expanding diagonal e.g. 3029/3001/3020/2958/3014/2914 and as this would be :3:3:3:3:3, allows a sharpish recovery to test trendline resistance from the top (currently 3000-ish) then another downleg?

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    1. @novice: the argument against that is that the third was would 'consume less time' than the first wave. It is usual in expanding diagonals for the larger waves to expand in 'time' as well as in price. So, while it can not be ruled out, it just has a lower probability.

      Also, please see the video update for the next day's post.

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  8. There is a new post for the next day, and it's a video!

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