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.
|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.