Sunday, October 27, 2019

Triangle Seen as Completed

In my humble opinion, the large daily triangle we have been noting as of October 17th is completed. We saw a way to complete it then, and it still appears to be a done deal. We have counted the minute wave ((a)), up, as a diagonal, and it is likely a leading diagonal. See chart below.

ES Futures - Daily - Triangle Wave X appears Completed

As of this time, it does not appear to me that there is a satisfactory minute ((b)) wave, down, yet. There is nothing wrong or incorrect (that I have ever read) about a flat wave following a diagonal. Let me say that again: there is - from what I have read - nothing wrong with a flat wave following a diagonal.

What would be odd is another triangle of the same degree immediately following a diagonal. Why? The triangle and diagonal are "cousin" patterns. They both consist of five overlapping waves, and to have a triangle minute ((b)) immediately follow a diagonal minute ((a)) would be poor form. It would be poor alternation.

So, here is the best short term count I can develop.

ES Futures - 4 Hr - Minute ((a)) and Flat Minute ((b)) ?

The possibility of a flat wave in this location was discussed before, but when it apparently ab-ended prematurely, perhaps I just did not give enough 'time' for the minuet (b) wave to develop fully. Such a count would allow the minute ((b)) wave to provide both more time and more depth for a more full correction of minute ((a)). As shown, minuet (b) is shorter as an up wave than the minute ((a)) wave, and thus the pattern and its subwaves fit within the allowable degree considerations.

I think this pattern would also confuse the daylights out of others who may try to extend the triangle count. That is always to the market's advantage to do so, thus it makes some sense.

For this count, a down wave would likely begin on Monday, and perhaps go into the Federal Reserve announcement on Wednesday.

Have a very good rest of the weekend.
TraderJoe

P.S. Readers of my blog would also do well to watch this brief video. LINK.

42 comments:

  1. This post was updated to add a recommendation to watch a brief, but important, video. See the link above in the P.S.

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  2. This would eliminate the larger triangle issues for sure. Your c = a x .618, the apparent small triangle within b reaches 75% thrust, and "b" of the assumed triangle is exceeded as req'd. This would certainly result in a much more "normal" correction of ((a)). If my measures are close, a 1.618 ext. retrace of (a)(b) would see a corrective move between .382-.50 of ((a)). Also appears ext. retrace of (a) is around 1.618 for (b) as well. All assumes high for (b) is in. We await the verdict. :o)

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  3. Not tryin to force a top here, but this is what I can measure:
    https://i.imgur.com/NgpWTkG.png
    https://i.imgur.com/T8LGGah.pnp
    It has the overthrow, but also very close to invalidate, lets see what happens on monday.



    Very close to invalidate...let`s see what happens monday

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    1. https://i.imgur.com/T8LGGah.png

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    2. As a sub-wave of (c), i is longer than (a) which would seem to violate degree rules. This was discussed several times in previous posts.

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  4. ..all .. please keep in mind the $NYAD (advance-decline line) is at a new all time high as of Friday.

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    1. IWM, transports, and the majority of FANG stocks topped in the summer of 2018. A-D Line at new highs is very bearish longer term.

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    2. COT report for the indexes looks like no one is short anymore? I find this interesting as well. Most investors are not hedged including professionals.

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    3. I am more than a bit ppuzzled by that A/D line stat that several analysts keep citing as bullish for equities. Granted it is true this market has ground higher on dwindling volume but we also now have clear negative divergences seen on multiple time frames that tell a different story. Other cracks are appearing and frankly I personally question how forthcoming CBs have been about the extent of their intervention to mask market weakness. The notion that the cabal is going to "start" Q.E. infinity next month is beyond laughable.

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    4. New price highs resulted after $NYAD high. That's all I was saying.

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  5. TJ,

    The floor traders think is below them is thin ice.

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  6. Just an observation.
    RE: DJI, say 2hr chart from Oct 3rd low. If we consider an abc up, then we have a virtual a=c. Initial move down breaking 0-B TL, retrace to around .786. Just a starting point for discussion. This would present a much different view than SPX.

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  7. https://i.imgur.com/VxBzqUX.png

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  8. looks like five distinct waves up this am.

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  9. Perfect abc up off October 3 low with the C wave a classic CED.
    I am now looking for a very sharp reversal to confirm.
    VIX green print at new highs may be hinting at a terminal wave...

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  10. Could also be just in the middle of thrust out of triangle since 10/03.

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  11. Repeating Fib Levels

    3047----2.618 2007 to 2009 decline
    3081----1.236 X A wave decline
    3167----1.382 X A wave decline

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  12. Vix is up this am.....interesting

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  13. AAPL 5th wave invalidated. Going parabolic on daily?

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  14. I think this tripple as a very high prob of being correct, nice alternation with x1 and x2, even degree ok btw intermediate ((A)) down which triangel count does't have
    https://invst.ly/njueb

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    1. ET cash doesn't have the overlap, so maybe the count your showed yesterday on first chart might work with the triangle minute b
      https://invst.ly/njun3

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    2. So minute a was an impulse..

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  15. RE: the abc flat count. The 125% max of thrust from small triangle of "b" has been reached.

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  16. G3 CB balance sheet is expanding thanks to "not QE".

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  17. Next on the agenda should confirmation of an exhaustion gap. If not, perhaps one more ramp to tag 3060. This market looks, smells, and feels like a dead man walking, frenetic upside ramps notwithstanding...a move below 3020 and I think we're done...

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  18. As an aside. Drawing a TL from Jan '18, Sept '18, July '19 provides a 4th "touch" right around the 3060 area.

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    1. Interesting SPX has taken out prior high but DJIA facing formidable resistance at prior shelf of double top and printing a shooting star so far...we know the cabal can negate it but until they do it remains inter-market divergence...

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  19. The VIX readings I find problematic. I guess it is possible that the crowd is really that bullish and feel no need to hedge against all the clear red flags the market is flying. It is also possible that reading is bogus....makes no sense whatsoever...

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  20. Yardeni research does the balance sheet work every week.

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  21. Lots of people looking for a top in THE SP500 3050-3100 range. I would be careful shorting in this area as we know the market loves to lead the sheep to the slaughter

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  22. Have a hard time believing this does not go up and check out the weekly TL.

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  23. The fact of the matter is that all prior gaps have served as support, even when tested for several days. Mind the gaps...

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  24. ES 5-min; most recent up wave getting quite wedgy

    https://invst.ly/nkchd

    TJ

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    1. Here's an update on the wedge

      https://invst.ly/nkgix

      TJ

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  25. Does anyone else see a possible large CED from the Dec 2018 lows?
    If so we still need a "throw-over" of the 5th wave for DJIA...

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    1. I think there a problem with 4 being longer than 2 but that is relative to where u think the 4 ended.

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    2. It's very close, but I think it is just shorter...

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  26. Checked the wave relative sizes and it does seem possible. In SPX possible fifth wave approaching max allowable length as compared to third wave...

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  27. I am thinking we are not quite done yet. I still expect the FIRST wave down of this B wave from hell to demolish multiple S/R shelves. Looking for one more ramp...

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  28. A new post was started for the next day.

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