Flexibility

U.S. Debt Clock: $22.63 Trillion
ES Daily Candle: Higher High, Higher Low, Lower Close: Yin-Yang Candle
Market Posture: Neutral-to-negative and Probing Waves
Daily Swing Line: Neutral (Higher High, Lower Low)
Daily Bias: Down (Settle Below 18-day SMA)

If you don't think patience and flexibility are needed in this current market environment, then you must not be looking at the same market I am. If you don't know the allowable rules and have flexibility, it will not allow you to make, not one - but three - near perfect wave-count calls in near real-time in two days.

SP500 Cash Index - 5 Minutes - Three Wave-Count Calls

Yesterday, we had called for a five-wave impulse wave upward as shown with waves ((3)), ((4)) and ((5)) on the left. This was documented in the comments. Then, this morning we called for a double zigzag, lower, shown as ((W))-((X))-((Y)) also in real time. We then provided clear instructions to watch for a possible channel break and back-test before beginning any upward count.

When the double-zigzag clearly ended, the first wave ((1)), up, could only be counted as a "three", and we noted the same with wave ((3)). When wave ((4)) also also was a "three" and overlapped the first wave in the downward direction, we said be on the look out for an expanding diagonal. We said that crossing 2,983.50 would prove a diagonal was forming. Prices then crossed 2,983.50 higher at 2,985 and they fell off a bit in a b wave, before resuming the c wave of the fifth wave, higher. We said that the limit on ((5)) is usually 1.618 x the length of ((3)) and prices did not reach that far. The market is still fairly weak.

Then, prices turned and the lower diagonal trend line was breached - which likely ended the diagonal. So, bottom line, yesterday's low still remains in tact, and because the high of two days ago was not exceeded upward, then neither was a "bear trap" declared (ala Ira Epstein).

You will note that at no time during the day, did critics of this blog say "good call", "good job" or anything like it. Why? Probably because they are just trolls or just trying to express their all-important egos. I'm trying to indicate to you, that, if you are willing to take the time, the energy and the patience to learn the Elliott Wave rules that it may be productive for you. Maybe not: they can always be misused.

I certainly do not intend to count five minute waves every day. But, today, I did it for the exercise and because, well, there was nothing else to do with this market.

But, there is clearly something operating that needs to be worked out. If you look at the overnight futures, you will see a higher high: another one of those invisible waves that don't show up in the cash chart. Yet, the cash chart counts properly and channels properly without those waves. With the overnight futures considered as 'invalidating' cash, then the downward count in cash does not work. But, the count did work and led to precise timing of a turn. And the futures also count properly as a diagonal upward after the cash market opened. So, what is going on here? Which set of data is better?  This is truly a topic to explore. I really hope some smart people can present some cogent information or excellent arguments relative to counting in one versus the other.

Until then, we do the best we can. 

Have an excellent start to the evening.

TraderJoe