Tuesday, October 1, 2019

Reality Sets In

U.S. Debt Clock: $22.64 Trillion
ES Daily Candle: Higher High, Lower Low, Lower Close: Outside Candle
Market Posture: Neutral-to-negative and Probing Waves
Daily Swing Line: Lower (Lower High, Lower Low)
Daily Bias: Down (Settle Below 18-day SMA)

After we counted "five waves up", yesterday, we noted today was likely to see inflows from the usual sources (see yesterday's post). The first half hour brought in those inflows which was noted, and that created "one too many waves" for an impulse, i.e. a "c" wave up, as in the first chart below. Then at 10 AM, it was reported that the ISM - Manufacturing dropped significantly - to 47.8, the worst in 10-years per CNBC. The market reversed, and the Dow and the ES futures, in the after hours, made five-waves down, although the S&P cash did not yet. Here is the Dow cash.

DJIA Cash Index - 5 Min - Five Waves Down from High of Day

The move down was very choppy after the news announcement. And the move did not channel well. I do not have concerns about the degree labeling because wave ((1)) could have ended a couple of bars before the exact low. Hard to say.

Today "could be" near the end of the minute ((b)), downward, to the 38% retracement level, and to find support at the horizontal tops across the August highs. One should note that price has contacted the lower daily Bollinger Band (where the "Smart Money" sometimes takes some off the table), and the daily slow stochastic is in over-sold territory (a condition which, never-the-less, can persist).

However, we will again not be counting up waves on the daily chart until or unless today's high - the high of an outside day down is exceeded. At this point, we will try to count a retracement wave upward. Here is the daily chart.

ES Futures - Daily - Last Chance for Minute ((b))

Extreme flexibility and patience is still required. In theory, "B" waves can do almost anything they want. In this case, the minute ((b)) wave may not become longer in time than the X2 wave, as was noted yesterday.

Have a good start to the evening.
TraderJoe


27 comments:

  1. Should one of the invalidations that you've mentioned last couple of days occur, but with no downward impulse, would you consider the below a valid alternate?

    A single X wave triangle with
    ((a)) at your X1
    ((b)) at your Y
    ((c)) at your X2 (can a zigzag within a triangle truncate?)
    ((d)) at your ((a))-Z

    The barrier triangle you pointed out on smaller time frame a couple of days ago made me think of this.

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  2. Updated my UPS chart. Blue boxes indicate clean impulses. It gave away the game again :)

    https://ibb.co/R2Z3N9N

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  3. Because the morning showed a failed breakout on the recent 10 day upper trendline, I think it's safe to say the market will NOT hit a higher high (B target). It's really unusual to have a failure of this magnitude, followed by a complete recovery, and have another failure of significantly more downside.

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  4. Cash going for the 2nd gap fill at 2909 but now big island top..

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  5. How about this tripple zz? Second X as a triangel or flat?
    https://invst.ly/g1e59

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  6. Looks like completed impulse up on gold

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  7. Cash nearing 1.62 extension at 2880

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  8. Now the break on QQQ is very clear. Very low chance it's another false move.

    https://finviz.com/chart.ashx?t=QQQ&ty=c&ta=1&p=d&s=l

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  9. This is the best completion count I can develop at this time. Until we see a legitimate fourth wave up, and fifth wave down, then the down count alternate is a-b-c, down.

    https://invst.ly/g24-g

    TJ

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    Replies
    1. Price is closing in on a 1.618 move to the downside.

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    2. Watch out for this potential "stall job" pattern to possibly end a third or C wave. This is a very short term 1-min chart.

      https://invst.ly/g2p06

      TJ

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    3. Wave ((5)) now longer than wave ((3)), call of a diagonal 'confirmed'. Also, hitting 2,880 makes > than a 1.618 wave.

      https://invst.ly/g2vji

      TJ

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    4. Since it would be presumed ending, it should fully retrace by around 2:40, correct?

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    5. @ jwtx .. only if it is done; I am still waiting on a 'clear' five waves up.

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  10. The up wave is holding the back-test of the diagonal trend line, so far, but needs to make a higher high for anything upward.

    https://invst.ly/g3pzk

    TJ

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    Replies
    1. ..there's the higher local high; can now rule in third wave of "a", either as an impulse or a diagonal "a".

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    2. ..now above prior wave ((4)) ..

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  11. "three-waves-up" to 1.618 and now over the start of the downward diagonal fifth wave.

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    Replies
    1. here's a chart; a 1.618 wave upward.

      https://invst.ly/g4lgx

      TJ

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  12. Check out $CPC at Stockcharts

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  13. Downward overlap on wave i/a, up. This is a clear example of why it's not yet safe to "assume".

    https://invst.ly/g4xl6

    TJ

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

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