Today made a marginal higher high daily bar, and I said upward wave counting would begin at that point. It is also just the second day of "snap-back towards the line previously violated". The daily chart of the S&P500 shows the most probable count, with about 80:20 probability.
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| SP500 Cash Index - Daily - Snap Back Towards the Line |
During many years of looking at the market, a lot of things have been observed. This nice looking retracement back to the 38% Fibonacci zone looks "warm and wonderful", doesn't it? Today again met with that up sloping trend line of resistance. The probability placed on this count is 80:20 for a reason. All it will take is one "progress on China tariffs" tweet, and the upward wave (ii) could extend to 1.618 x a. Where is a? Here is the short term count, below.
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| ES Futures - Hourly - Upward Corrective Wave |
Right now the upward c wave is very, very overlapping, and it may only be the start of a diagonal for the c wave. It did make a marginal new high today, but only a marginal new high. In no case may the c wave travel below the low of b (in terms of the invalidation level).
Now is the time for calm, patience and flexibility.
Have a good start to the evening.
TraderJoe
Thanks ET. Very nice charts. c of ii currently 3 waves. I have the 3rd wave marginally longer than the 1st. If we come down to overlap the top of the 1st at 2869 for iv then v of c of ii can be any length greater than iii of c of ii. If c of ii = a of ii we are talking 2931 which incidentally is the about 1 point off the 61.8% retrace in futures. Cash retrace to 2931 is 53%.
ReplyDeleteThanks!
ReplyDeleteWhy 80:20? Anything we haven’t mentioned before?
I mean what specific reason are you referring to?
DeleteJoe, Echoing Erik B trying to understand which is 80? is that (iii) down?
DeleteIs the 20 is still a higher high with a Y up? or is the 20 the c becoming 1.618 of a? Again thanks for all of your analysis that you post here. I have never learned more about EW from anyone else.
DeleteYes, the 20 is still an impulse wave up, until disproven.
DeleteOne w ay to count the potential c of ii.
ReplyDeletehttps://imgur.com/XJsZAs2
No, degree violation. You're purple 1 2 following the blue 1 2 is longer in time.
DeleteMy chart had some questions I know but price is supporting at this stage (lol). Remember last week I mentioned a common 1.382 waves a & c relationship. That would target 2982 and 1.618 would target 3008. a = c at 2931. European indices may need the higher US targets as they're still struggling relatively speaking. There is some movement with Madrid putting in its biggest upward move so far points wise and reaching the 23.6. Milan has not confirmed with its biggest move yet. Also huge PUT open interest in play. A nice recipe for a ramp into OPEX next week.
DeleteI like the approach of seeking out validation using other indices while trying to count retrace in ES/SPX. If there is a play for large C wave down, all indices will be participating in that.
DeleteSince it's impossible to count the down wave as an impulse wave in Dow and NDX, it must be counted as a corrective wave in SPX/SPY/ES as well.
ReplyDeleteI think all indices on their own. Maybe Dow and NDX will participate in large C wave as a diagonal. I actually think that the indices being on a different wavelength helps validate the overall thesis. For example, if Dow and NDX diagonal gets invalidated, then it may be a sign to revisit the count and the alternatives on the SPX/SPY/ES (the impulse down in the last 10 days may have been a c wave instead of wave 1 calling for one more high)
DeleteI always go with the count that works in all the major indexes across the board. In this instance, the only count that works in all the indexes is the corrective wave count. If the indexes are supposed to represent the overall market, then it makes zero logical sense that one index would be in an impulse wave, while all the others are in a corrective wave.
Delete@TJ ..see below at 12:33 pm.
DeleteNested 1-2s in cash?..
ReplyDeleteCash now has a 1.618 x i, up.
ReplyDeleteBased on the 0 - 2 trend line in futures, this is one of the two best ways to count the futures (with Alternate clearly provided in red).
ReplyDeletehttps://invst.ly/bn100
The second best way is i of (c) is on the 7 Aug high, and everything in the after-hours is a second wave flat.
TJ
What is it that puts the bearish count ahead of the bullish red alt one? Doesn't the move from the top to recent lows look more three wave - ending with a five waver - thus more A-B-C corrective (against the uptrend,) than a bearish impulse move?
DeleteI think you got it ET. Concur,
Delete3 of iii of C? I think the 1.382 at 2982 may be conservative. iii of C may reach there by itself. European indices now breaking out of the stupor and starting to confirm the upward retrace. They have a long, long way to travel to provide a reasonable retrace.
ReplyDeleteTo some of the points above, I concur with many. Some see a three-wave move. That is certainly possible. The Russell has made a new low. The DOW was the cleanest 'five-wave-move' to the high. What if minute ((b)), below, needs a much 'time' as minute ((a)), up, took? See chart below. We've had a rapid, dramatic drop to about 78.6%, just a hair beyond.
ReplyDeletehttps://invst.ly/bn1s0
TJ
P.S. I keep wondering, 'where's the big triangle'? Ala the 'hounds of Baskerville', "why is the dog 'not' barking"?
DeleteHeads up guys - 5 wave decline on the 1 min chart - Let's see if get a corrective move higher after it's complete
ReplyDeleteLINK - https://imgur.com/dCLqgs9
Counts better as a A wave. Look for a probable triangle.
DeleteAgree 6Q .. or part of a flat. See below @1:50 pm.
DeleteJust for info .. there is an actual gap in the hourly futures at 2,934.50, as below.
ReplyDeletehttps://invst.ly/bn2sb
TJ
Here's one way to look at this wave. Five waves up, and a 14% pull-back which may only be part of a correction.
ReplyDeletehttps://invst.ly/bn36q
TJ
Note that 0.382 is back at the prior wave ((4)).
DeleteWhy is ir that EW analysis so often seem to ignore other technical indicators in offering a probable wave count. Does anyone believe, considering the larger technical context, that this is anything other than a (expected) furious bear market rally, to be shortly followed by a devastating third down?!
ReplyDeleteYou might be correct, this could be a bear market rally. Hate to tell you how many times I've seen a sharp sell off that, by standards of classic TA, seemed incomplete but was interrupted by what appeared to be a bear market rally which rally just continued on & on & on. And left me with a loss on some ill advised shorts. I ALWAYS formulate a possible bull & bear EW count to keep myself tuned to the possibility that my bias at any time could well be wrong....
DeleteHave you never read here about put/call ratio, sentiment, and oscillators like the EWO/AO ?
DeleteOf course, everybody looks his preferred indicators to confirm tops or bottoms. ET talks about them when is significant in his analysis and videos
ES price has just gone over the high. Probably for the "b" wave of the flat described above. Chart below. Also, the futures gap described above at 2,934.50 was just filled.
ReplyDeletehttps://invst.ly/bn4zw
TJ
Thanks, could also be 12-i-ii
DeleteThank you ET. It seems logical a flat that during the night, the price go to touch the 0-2-4 trendline (if there is not tweets that distort it, lol)
Delete..possible!
DeleteDone !
DeleteI thought that sideways action best suited 4 of iii of c. Now in 5 of iii of c. ii of c on ES was around 20 points and the sideways activity we saw in the afternoon was much smaller and looked inadequate in terms of proportion. In any event the "c wave" is moving along swimmingly.
ReplyDeleteA new post has been started for the next day.
ReplyDelete