Thursday, October 31, 2019

Rescued at the Close

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

Earlier in the day, in the comments, I published a possible fourth wave in a channel diagram for the ES hourly futures. You are encouraged to review that chart. There is one modification that allows any higher all-time high to be a completed impulse (overall, upward). 

The Dow hourly chart is intriguing and is shown below.

DJIA - Hourly - Potential Diagonal

The "rescue" at the close refers to the fact that this pattern, and the fourth wave of the larger impulse pattern were prevented from failing today by a sole bar in the last hour. Further, the ES daily slow stochastic, which was in jeopardy of losing it's embedded reading, was also prevented from going below the 80 level by the cash settlement.

IF the above Dow diagonal forms properly, and if the larger "impulse in a channel completes properly then it might be possible to label the minute ((a)) waves at the same location, and begin monitoring for the minute ((b)) waves. Again, the above potential diagonal must form properly in every detail, including a wave ((4)) that remains shorter than wave ((2)), and a wave ((5)) that remains shorter than wave ((3)).

The market is clearly jerking prices around as it is buffeted by trade news, poor manufacturing growth, and the latest impeachment resolution. Still, there is an upside bias as given by the 18-day SMA, so now - as always - is the time to be flexible, calm and patient.

Due to being near to a potential fifth wave location, my market posture has changed to neutral-to-negative from just neutral (this is not to be taken as trading or investment advice).

Have a good start to the evening,


  1. The DOW has the higher high required of the potential diagonal wave.

  2. Basis cash SPX, small time frame, would you see us in 5th now from yesterday's late afternoon low?

  3. Watch for a possible interim top from a triangle.


  4. Thanks. I was seeing a triangle as well. Thanks for the post.

  5. Triangle converted to a clean 'likely' ending diagonal at the close.

    1. here's the potential ending diagonal as of the cash close


    2. Nice hanging man candle to end on. :o)

    3. Looks more like a gravestone doji on 30 minute....

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