ES Daily Candle: Lower High, Lower Low, Lower Close: Yin-Yang Candle
Market Posture: Neutral and Probing
Daily Swing Line: Neutral (Higher High, Lower Low)
Daily Bias: Up (Settle Above 18-day SMA)
Last night we asked readers to keep an eye on the overnight futures. Although prices started down somewhat last night - on data out of China - the price decline accelerated a bit in the pre-market when the U.S. Leading Economic Indicators also came in negative. As a result, the lower trend line of the two-hour diagonal was broken, as in the chart below.
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| ES Futures - 2 Hr - Minute ((a)) Likely Completed |
The Elliott Wave Oscillator turned negative, and that price shelf we discussed at 2,954.75 broke lower, along with the prior wave (iv) as we identified it. Further, yesterday's 'spinning top' candle appears to have a confirmation lower close candle following it.
However, during the decline in the cash market, we noted that to this time there were only three waves lower. A rally started at about noon, and can be counted as five-waves up in the futures. So, any number of structures is possible, including a flat, a multiple zigzag, or a continuation of the downward wave as an expanding leading diagonal (it would likely be an 'a' wave, down, if it occurred.) Right now, such a downward wave looks exceptionally shallow. We will try to provide more clarity as the wave progresses, but a first wave-counting target might be the 18-day SMA at 2,955 (not to be taken as trading or investment advice).
Please reference yesterday's post for the daily chart as needed.
Please reference yesterday's post for the daily chart as needed.
Have a good start to your evening and to the weekend.
TraderJoe
For accuracy, SP 18 day MA is at 2955 (though a move to 2855 might make the pattern clearer to pinpoint!)
ReplyDeleteThanks. Typo corrected.
DeleteMention was made recently of running triangles. Based upon the first 5 features per Neely, I believe GDX (daily) may qualify, where "a" is the Sept 24th peak. I would see it in "e" now. Any/all comments appreciated.
ReplyDeleteThanks
Grey .. I think you are grossly misinterpreting something you read. GDX has the three lower divergent lows which are characteristic of a diagonal. Always start by putting 120 - 160 candles on the chart for "the wave of interest", and add the Elliott Wave Oscillator.
Deletehttps://invst.ly/lwt6g
In any event, if you can not find these patterns easily and simply then I would highly recommend re-reading The Elliott Wave Principle by Frost and Prechter. Lack of knowledge might be very, very detrimental otherwise.
TJ
Thanks for taking time to look.
DeleteMy reference was Neely, p. 5-30, c. Running Variation. The conditions appear to match up (to this point), but perhaps Im misapplying here.
ReplyDeleteThanks again for taking time.
In general, a triangle of any type can not be "called" until all five of the legs are in place. Doing so with only four legs can result in the pattern busting (to just a double combination). Even though I called for a triangle in the weekend video (below), it was 'only' as an alternate because not all five legs were in place. And, I specifically note that not all of the legs are in place.
Deletehttp://studyofcycles.blogspot.com/2019/09/weekend-video-getting-close.html
TJ
So, I looked at the book to see where the confusion might be coming from. p 5-30, c item #3 is a misprint. In a contracting triangle, even if it is a "running triangle", then wave d must be "smaller" than wave c; other wise the triangle won't contract overall. Sketch it out and you'll see this must be so.
DeleteItem #3 must read, "wave d must be smaller than wave c".
Oh well. Mis-prints happen.
TJ
Unfortunately it is not a misprint
DeleteLook at fig. 11.26
Neely's "running corrections" (in general) have nothing to do with "classic" running corrections.
They end above (?) the previous wave top (or below the bottom, so they don't correct anything... but I am not an EW guru like Neely :)
Yes, John, it is a misprint. All "running triangles" are contracting triangles. Therefore, d must be shorter than c. I am aware of his stance stance on other 'running corrections', which I vehemently disagree with.
DeleteIn all the years I have been counting Elliott Waves on this site, I have never had the need to use a 'running correction' which does not somehow overlap the prior wave - in any market. In fact, allowing those types of 'supposed' corrections allows one to count in 'any way the counter wishes' because it can't separate a four from a three, or a two from a one, or a 'b' from an 'a', etc.
There is no one single way to count waves. For example, while Joe has never had to count a running correction which does not somehow overlap the prior wave, Neely has never had to count a leading diagonal in any market on any timeframe. Different strokes for different folks.
DeleteNot ideal in time but it does work.
ReplyDeletehttps://imgur.com/fFMps6e
There was a small barrier triangle this morning in ES, so this could fail quite easily.
DeleteAAPL in 5th wave up from Oct 3 low.
ReplyDeleteI see that also, maybe 12345-> C..
ReplyDeleteES idea
ReplyDeletehttps://imgur.com/wPQ8VxX
After "three-waves-down", SP500 cash reaches 90% retrace level, and can qualify for the "B" wave of a flat, or a higher wave.
ReplyDeleteIn the short run (ES 15-min), I'd watch the red and the green fractals. Right now can only count a triple zigzag which is not a diagonal due to lengths of the second 'x' wave, and the timing.
ReplyDeletehttps://invst.ly/m71o2
TJ
..upper (Green) fractal just broke; likely continuation of 'z' wave.
DeleteShouldn't this wave take out the high from last Thursday at 3008.29 prior to completion?
ReplyDelete..certainly can, but is not required to.
DeleteI also noticed channel lines not quite parallel nor contracting...is that probative?
ReplyDeleteES 5-min; on triangle watch (or potential truncation)..
ReplyDeletehttps://invst.ly/m787n
TJ
..now up and over triangle, likely 'proving out' the triangle
Delete..thrust out of triangle,
Deletehttps://invst.ly/m78xq
TJ
A new post has been started for the next day.
ReplyDelete