Tuesday, October 29, 2019

Clarity Required

U.S. Debt Clock: $22.93 Trillion; prev $22.93
ES Daily Candle: Higher High, Higher Low, Lower Close: Yin-Yang Candle
Market Posture: Neutral and Probing
Daily Swing Line: Up (Higher High, Higher Low)
Daily Bias: Up (Settle Above 18-day SMA)

Yesterday, we said that if there were higher highs, it was possible to begin to make an impulse out of the minute ((a)) wave up, which started out as a diagonal. This morning there were higher highs - for a few brief moments. The three-block below shows why this 'third wave up' consideration is possible using the S&P500 cash, the NDX cash, and the DJIA cash indexes.

Is the Minute ((a)) Wave Extending?

You can see on the left and the middle, that is is possible to consider a short, running flat wave ii, (in the SP500) followed by a five-wave-up wave for wave iii. In this case, wave iii would be shorter than wave i. That is OK. There is no rule preventing it. The rule is simply that wave three is not the shortest wave.

But the Dow seems to be having none of it, and had not made an extension up yet that allows enough room for a fourth wave without overlap. So, is minute wave ((a)) still in progress? More waves are needed. 

With the FED announcement tomorrow, and such uncertainty in the wave pattern, it seems best to let a few things shake out. For the "diagonal-turned-impulse" sequence (ala the first two charts) there should not be overlap on wave i, as shown by the red dotted line.

And yes, if minute ((a)) was completed as we originally indicated, and as shown on the Dow chart, then it is possible that the wave ii, and a are really the minuet (b) wave after the diagonal minute ((a)) and we have started minute wave ((c)), upward.

Flexibility, patience and calm are required as well as some quick thinking here to see what wave pattern is becoming most prominent. So, get some rest, and ...

Have a good start to your evening.
TraderJoe

18 comments:

  1. Joe I reviewed your nicely explained video from Sept. If a 5th wave impulse wave completed in October 2018 and we are in a B wave correction that is at new highs, wouldnt that mean when the correction is ended whether it be an ABC or triangle that the market will impulse higher or at least a truncation? According to EW doesnt an impulse high occur at either 1. Ending diagonal 2. Truncation or 3. Extended 5th wave? Thanks for the video. Sam

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  2. Just an observation, fwiw.

    https://imgur.com/dIYd8DK

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  3. Stay nimble and attentive. This 'could' be the signature of a larger hourly impulse, with 134 candles on the chart.

    https://invst.ly/nos3e

    TJ

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    Replies
    1. ..because of the height of the bars immediately following ((3)), I think there 'is' in fact, already alternation, in comparison to ((2)), and no further alternation would be needed. ((2)) is a sharp, and ((4)) could be a complicated flat.

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  4. Dow Trans leading the way down minus 250 pts -2.33%

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  5. reminder: FOMC decision in 2 hr at 14:00 ET.

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  6. I suspect the kind of degree turn we expect from these levels will nor be amenable to uncertain speculation. Price continues sideways in a "ramp & camp" consolidatuon and points to at least one more move higher...just my two pence...

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  7. Another observation (fwiw). The 1.05 ext. retrace of the move down from July peak to Aug 15th low has been reached (basis SPX cash).

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  8. Gold ED did not hold, so I think we are in b of y.

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    Replies
    1. Completing a corrective wave, miners triggered a buy...

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  9. With the higher high, there is now an hourly impulse, as suggested by The Eight Fold Path Method.

    https://invst.ly/npa07

    TJ

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    Replies
    1. Yes indeed...looks terminal to me...

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    2. ((5))=((1))->3056.75 and now we have ((5))=((1))*78.6%

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  10. A megaphone pattern (hourly) right at the top of a
    giant megaphone pattern....

    https://i.imgur.com/Oq1Jesr.png

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  11. A new post has been started for the next day.

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