Over the weekend, on Saturday, we posted that the up count just could not be made into an impulse wave, primarily because the wave had not broken the channel to the upside, yet. Today, the channel broke to the down side before the channel ever had a chance to break to the upside. That's a negative, not a positive, for the upward progress of U.S. equity markets.
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| ES - 1 Hr - Broken Channel |
Although the Dow finished a ((C)) wave in a way that looks more pleasing to the eye, the ES finished with an attempt at a breakout of a fourth wave triangle, iv, shown above. But, that breakout in the overnight market failed on the news that protesters had shut down the airport in Hong Kong. That news - and the channel break, lower, that follows it - is the proper start of the next wave lower. It breaks the previous up wave in less time than the up wave took to form.
As many noted today, the downward wave overlapped the ((A)) wave high, and therefore lends increased confidence to a downward count. So does the failure. So does the channel break, lower.
Some have criticized this web-site for difficult, challenging or incorrect Elliott Wave counts. In response one can only look at two of the supposedly more popular web-sites and note have they have still been banking on either a primary fifth wave up (wrong - done and over in Oct 2018), or a full on Primary 3rd wave higher. I think they are misleading their readers and / or paid subscribers.
How are you going to get continued up waves with the clear failures we are seeing between the Dow and the S&P on many occasions now? Ask them. Not me.
Have a good start to the evening.
TraderJoe
👍 Thanks
ReplyDeletehi joe
ReplyDeletethank you for your work
you can do a weekly update?
thank you
Volume was ordinary today. No real interest to sell. Expecting a rally tomorrow, perhaps after some early weakness. If we still count 5 down, or nearly 5 down, that would work for me.
ReplyDeleteShould also mention the DAX had a decent drop (170 pts) from its intraday high, retraced 40% and then the DAX futures went to a fresh low. The 2nd move down is much shorter than the first. More importantly it's a perfect 1.382 of the 40% retrace so another potential expanded b wave. DAX futures would need to rise 0.8% from current levels to reach the original 40% retrace level for the c wave of a potential expanded flat. If that happens then Wall Street should rally tomorrow as well. Thereafter the situation would become quite bearish.
DeleteShould make one further point. If events prove not to be bearish tomorrow and the next day then we should keep in the back of our minds the possibility that last week's highs were only an "a wave" high and since then the market has been falling in a "b wave". DOW cash and SPX have so far held their 61.8 retracement levels if only just … a reasonable spot for a "b wave" to conclude. In futures this drop has retraced around 40%. However for degree purposes this decline is the biggest in price and time since the retracement rally started so it fits okay as "b wave" on that score.
DeleteWell seen Billy !
DeleteYes Sir!
ReplyDeleteI see some crystal clear technical breaks of long-held trend lines, as well as a plethora of other bearish developments and looking st very bullish counts being blithely and confidently published by some and find myself wondering:
"What on earth am I missing?!"
While I have a healthy respect for those who have devoted many years to the practice of EW analysis, I remained mystified by much of what I am seeing and hearing from many of the craft's experts...
Thanks Joe...
Joe -
ReplyDeleteHow do you go about 'objectively' determining whether that v of C is a truncated impulse? It's barely a pimple on that chart. To me it the possibilities look like a series of overlapping zig zags such as this: https://imgur.com/HdGcM8O.
Thx
-TJ
I didn't. The market did. Clearly from the weekend charts I would allow the S&P's 5th wave of c to catch up with the Dow'. It was the market that said 'nothing doing'. But there was a very, very clear triangle that again 'should' have allowed the 5th wave to pop. Market wouldn't have it. Not me. Now we are well out of channel.
DeleteI wish I can have this conversation with you over a couple of beers. I just don't get it. A triangle can also be a b wave as I have shown here.
Deletehttps://imgur.com/AT2dZqn
That said, you're the expert so I have to go with your version of the count whether I get it or not. I'm looking forward to see your count build on top of yesterday's failed 5th after the panic bid up this AM that took us to higher highs.
Price simply back-testing underside of broken short-term up-trend channel.
DeleteSound and fury, imho...
This down wave on Russell 2000 futures is starting to approach the same time consumed down as the larger degree down wave, but without really going nowhere..will be hard to avoid degree violations in the future if top is in..just sayin.
ReplyDeletehttps://invst.ly/bqbpu
It is this move the metamorphosis to w-x-y up ?
ReplyDeleteGiven that ES and DOW are "over the top"; this speaks to the "Triangle B" wave idea I spoke of earlier. Very whippy in triangles. Poor counts, and truncations in the SP500. Hard to see what else it could be at this point.
ReplyDeleteThe triangle idea was covered in this post on Thursday of last week I believe.
Deletehttps://invst.ly/bn1s0
TJ
Posting your probable counts from last week for convenience.
Delete1) Second wave up as a,b,c
2) Impulse up
3) Larger triangle
By order of elimination, is number 1 and 2 now invalidated? If yes, then that leaves a 100% chance of B wave triangle with new all time highs in c wave?
But of course there should always be an alternative count because there are no certainties, only probabilities. Question is, what's the alternative?
I suppose #1 but as a complex correction. We haven't gotten to 78.6 retracement of downward move from ATH yet and the upward correction is not yet as long in time as the downward move from ATH (although it will be by the end of the day).
Delete((b)) would take way more time than May decline.. so only way to avoid degree violation is same degree ((x))
ReplyDeleteAlso (a) on above chart bigger price decline than May..have to be same degree?
DeleteMorning group..could you show that triangle B on a 1 or 2 hr time frame please..i think it would help me see better the direction..Thank you ET
ReplyDeleteGentlemen,
ReplyDeleteAny reason that this large wave up can't be the top of an expanded flat b wave? From the truncation of 5 (a) up it seems in the futures it is 5 waves down making it possibly an a down, b up which just happened and now the c wave to follow? Measuring from the truncation the b wave that went up is close to 1.272 Fib of the a wave down.
chart?
Deletehttps://imgur.com/jWpNaIu
DeleteTJ I can not get 5 waves down in the cash though.
DeleteI'm not sure whether that wave down from the truncation can be counted as an impulse. All of wave 5 is outside the channel drown from 0 to 2. That save wave can't be an impulsive diagonal since there is no overlap between i and iv. Additionally, if there is a higher high today, then your b wave that just happened is invalidated because the b waves can't be 5 wave structures.
DeleteThis is all my take on it, can definitely be wrong.
Seems to be easier right now to rule out invalidated counts instead of putting a thumb on a valid potential.
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ReplyDeleteES stalled at the former uptrend line. But likely going higher yet. BTW the most obvious count hasn't been mentioned today, maybe cause it's too obvious. How about a & b off the lows complete and now in c up. Possible iv of c on the ES just held the 38.2%. iv of c maybe done or will become more complex and retest the 38.2% or even triangle.
ReplyDeletePossible 5 up off the 38.2% for 1 of v of c? now in 2 of v of c? Will watch the retrace levels.
DeleteBilly - Looking around the web, most seem to think that the 'c up' you mentioned is really wave 'a' of a bigger C up. If the leg up from this morning is all of C, it's kind of small in length and time compared to wave the proposed wave A.
Deletelike this...https://imgur.com/AT2dZqn
Deletebut I'm skeptical, if everyone and their moms are expecting this, it's not gonna happen. I've seen blogs that think this is really wave 3 up for much higher all time highs soon.
TJ, IF it's a c wave then it must be 5 waves, not abc. But I guess it could a double zig-zag. Count of 1 & 2 of v of c complete still plausible as YM/ES are holding their 61.8 retracement levels as I type. IF correct 3 of v of c next. Markets never make it easy and agree the most obvious outcome is rarely the correct one.
DeleteElliott_Trader, what's your short term count as of right now?
ReplyDeleteHere's a thought. If v of C truncated on Fri we don't know if this move up actually went over the phantom top of C. Not sure if that's a valid thing to think about in EW.
ReplyDeleteStarting to look like a 4th wave triangle.
ReplyDeleteDon't like the look of the triangle now. d wave too high. However if it stays in this range long enough theoretically it may have not even completed the b wave yet. Alternatively we stay in this wide range (26 points) waiting for the market to decide when it wants to break out or we are already in 3 of v and just haven't broken out yet. Because of the steepness of the rise, assuming it was a wave iii of some description, it may be waiting for trendline support which is gradually catching up. On the ES it's about an hour away but on the YM it's 4 to 5 hours away.
DeleteA new post has been started for the next day.
ReplyDeleteI like your response, TJ
ReplyDelete