The Daily Count

Close analysis of the following factors suggests the count in the chart, below, is applicable, yet, still within the Intermediate (B) wave, upward.

1. Length of the waves in price
2. Length of the waves in time
3. Position of initial diagonal
4. Position of largest triangle in time
5. Alternation regarding potential diagonals
6. Fibonacci retracement levels
7. Channeling
8. Support and Resistance

ES Futures - Daily - Probable Up Count

The current (b) wave which appears as a potential diagonal would not alternate well in this position as a fifth wave or a (c) wave. Therefore, it is likely one of those (b) waves that is really a triple zigzag, and it follows a three-wave (a) wave down which is too short in time to really correct the up waves. 

If this current down wave breaks the mid-line of the channel (shown as the dotted line) then it might be assumed that the minuet (c) wave of the minute ((b)) wave would be underway to possibly make a 0.382 x ((a)) wave, with a minute ((c)) wave up to follow. Then, price would likely find support at prior highs, and possibly take a stab at making new all-time-highs with potential divergences with indicators like the advance-decline line, etc.

There are other ways this could happen, but for right now, this count seems to fit with the W-X-Y scenario from last December's low. The count might also generate a lot of bearishness on the break of the channel lower, yet the minute ((c)) wave need not trade all that much significantly higher than present levels.

Have a great rest of the weekend.

TraderJoe

Degree Problem

U.S. Debt Clock: $23.08 Trillion; prev $23.07
ES Daily Candle: Higher High, Higher Low, Higher Close: Trend Day
Market Posture: Negative
Daily Swing Line: Higher
Daily Bias: Up (Settle Above 18-day SMA)

Today the ES daily futures closed above the upper daily Bollinger Band for the second consecutive time, as the daily slow stochastic is just still in over-bought territory (not embedded).

ES Futures - Daily - Second Close Over Band

This second close tends to lower the odds of remaining over the band to about (very roughly) 3%. Any close within the bands would now be a typical expectation. Five-to-seven closes over the band would be an exceptionally rare event. With this in mind, my market posture changes from neutral-to-negative to plain negative.

As readers get frustrated with the very short term intraday turn-arounds and seeming lack of downside in holiday-light volume,  we just recognize it for what it is - a holiday market. I remain patient, flexible, calm and observant. Nothing about my view has changed from the Intermediate (B) wave up. (B) waves are notoriously difficult to count. That is their nature. That is how they trap weak hands into remaining long in a market about to reverse.

One of the observations that paying attention to 'wave degree' causes us to make is that this up wave yesterday and today has taken too much time.

ES Futures - 1 Hr - Too Much Time

The up wave from the point marked ((2)) is more bars than the prior impulse from the point marked b to the point marked ((1)).

Therefore, some how these up waves can not be a larger b wave of an impulse, as b should not be larger in price or time than iii, if one was counting as i, ii, iii upward. This now leaves the possibility of a diagonal as (v) of minute ((c)) of (B). Therefore, somehow these waves must be of the same degree. I do not know the diagonal is over. It could easily have another down wave and another up wave. Hence the alt: ((3)).

Regardless, the pattern is complete enough to warrant the change in posture. The count also helps explain the lack of downside follow-through this morning. 

I'll try to publish more over the weekend. Sentiment measures are getting stretched - the most important of which is that people are getting testy with me again in comments. I love it when that happens.

Have a good start to the holiday.

TraderJoe

Typical Holiday Market - So Far

U.S. Debt Clock: $23.07 Trillion; prev $23.06
ES Daily Candle: Higher High, Higher Low, Higher Close: Trend Day
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Higher
Daily Bias: Up (Settle Above 18-day SMA)

In a fairly typical pre-holiday market lots of big players make their exits to be with friends and family or on vacation and prices are more free to float higher. Such was seen at the end of the session today. The price bias has been over the 18-day SMA since October 11th. The swing line is now up again, and price has closed up over the daily upper Bollinger band.

ES Futures - Daily - Close Over the Upper Band

There is only roughly a 5% probability of prices closing over the upper band, by random chance, on any given day. Of course, we know this is not purely 'random chance'. Three-to-five consecutive days over the band starts to get very, very low probability - in the 1 - 2% range. Like it or not, the Smart Money plays the odds. The slow stochastic is still just in the over-bought category. And, the daily gap in the futures, themselves, has been highlighted.

From a shorter-term wave count perspective, the chart shown yesterday is updated again, below. Today's afternoon rise could be yet another bubble-licious ((B)) wave. A ((B)) wave in a (B) wave?

ES Futures - 45 Minutes - Expanded Flat

If higher prices are made tonight in the after-hours, that might well fit with the ((B)) wave of an expanded flat. Reliable quotes show the ES 10/22 ((B)) wave was not higher than wave i. Therefore, a higher high wave in wave iv might provide reasonable alternation, especially if price makes a lower low than ((A)) - which it did not in wave ii.  The alternate would have to be that the low of wave ((A)) is wave iv in a wedge count, but the EWO did not drop below the zero line. So, we still need to be patient and flexible. Nothing rules out higher highs for ((B)) or for v. There are 130 candles on the 45-minute chart, we may switch to an hourly chart, yet, before this wave is done. 

The parallel channel is clearly shown. Price has not come close to the lower channel boundary, yet. My suspicion is they're going to make any ((C)) wave down difficult to catch - possibly occurring in the after-hours, and likely on some news story out of China or about poor U.S. retail sales over the holiday weekend. At any rate, price is over the 18-day SMA, and the price bias and swing line are up. Right? 

I hope you enjoy the holidays, and as I will be, too, there may be less frequent interactions with the site for the next couple of days.

Now is a time to be grateful for what we have, and share it with those who would like to or need to.

TraderJoe

Overnight Rally and Fade

Over the weekend we cautioned several times that there could be a larger (iv)th wave in play. Prices moved higher on Monday. Over-night there was a substantial rally as the Asian markets and Europe got a chance to react. The up move to 1.618 says the chart should be viewed with odds slightly in favor of a third wave rather than a c wave.

ES Futures - 45 Min - A 1.618 Wave

Now might be an excellent time to pay attention to the local up fractal, at iii, and the overnight down fractal that tagged the EMA-34. Wave iv did already tag 38% x wave iii. If it hits the lower channel in a zigzag it would be a 50% retrace. Nothing prevents it from forming a larger-in-time triangle.

Have an excellent remainder of the day and week.
TraderJoe

FED and the RED

This may seem like a technicality to some. While I think we are still in the Intermediate (B) wave, up, I have been wondering if we ever did see a triangle, at all. The chart below of price versus the FED's activity shows why I have a question.

S&P500 Cash Index - Daily - Ending Diagonal?

We all know by now that the FED's rate increases up to 2.50% (maximums used) into December, 2018 caused or correlated with the 20% decline in the market to that point. And, then we know the FED went into it's "patient" and "flexible" mode after the first of the year, expressing in a news conference with Ben Bernanke and Janet Yellen a willingness to be "flexible" on having the balance sheet roll-off be on the previous mode of "auto-pilot". Then, in February they actually reduced the balance sheet run off to only $50 billion per month, with an ending date to occur in September.

But, here's the key point. Have a look at the ISM Manufacturing numbers plotted, especially the first four of them. They are all above 50%, but declining from the April report.

55.3 > 52.8 > 52.1 > 51.7

Four months in-a-row of declining data. Even the FED would find a trend in that data. The FED decides now to lower rates to a 2.25% maximum - at what could have been the top of Intermediate (B) in the first count. The next report comes out at 51.2, and they quickly drop of bomb of ending balance sheet reduction immediately in August instead of even waiting until September. And I am wondering if that halted the decline from the top in a (c) wave of Minor B. Remember, commercials in the market were very heavily short at that time. In other words, the down wave ceased for a specific and definable reason at that location. Ending the balance sheet reduction allows the large players to change course and expand risk without worry.

Since that time the FED has lowered rates two more times as the ISM has gone quite heavily and consistently into the RED. Is the FED aware of the Elliott Wave count? Are they actively trying to thwart it? Good questions if you are asking them. And, those that have been paying attention know that since the overnight interest rate market has gone into spasms, the FED has had various announcements of increasing it's balance sheet by the purchase of T-Bills.

All of this has made me wonder if the pattern since the ending of balance sheet roll-off since isn't specifically an expanding pattern - an expanding ending diagonal. Why wonder? The expanding pattern would fit with the FED's current monetary expansion. The difference is that the expanding diagonal makes a clear prediction: If the diagonal breaks, then the start of the diagonal should be exceeded in less time than the diagonal took to build. We may not be done with the up wave, yet, but it has all of the right measurements.

So, why not the triangle? Well, if the triangle was, in fact, a running triangle, then the up wave in September should have ended around 78%, not around 99.9%. Triangles should not be that asymmetric.

Have a good rest of the weekend.

TraderJoe

P.S. This is the second report this weekend, and you may wish to read the first one, as well, if you haven't already.

Length of Time

U.S. Debt Clock: $23.06 Trillion; prev $23.06
ES Daily Candle: Lower High, Higher Low, Higher Close: Inside Day
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Mixed
Daily Bias: Up (Settle Above 18-day SMA)

From the ES hourly chart, below, the length of time of the up wave, today became longer than the length of time of the entire down wave. That likely means that the two waves are of the "same degree" and may create the situation where another triangle can form.

ES Futures - 1 Hr - Up Wave Longer in Time

The count is very choppy in both directions, and next week we will likely be in low volume holiday markets.

If we do get a triangle, it would likely be a fourth wave prior to a fifth wave up for the Minor A, B, C alternate for Intermediate (B).

Have a good start to the weekend.
TraderJoe

Loss of Embedded Stochastic

U.S. Debt Clock: $23.06 Trillion; prev $23.06
ES Daily Candle: Lower High, Higher Low, Lower Close: Inside Day
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Mixed
Daily Bias: Up (Settle Above 18-day SMA)

ES futures prices traded somewhat lower overnight, then higher, and then and somewhat lower during the day and the regular market session. Comments were included on yesterday's post as to what the local count might be.

ES Futures - Daily - Loss of Embedded Status

So far, on the the daily chart, the slow stochastic has lost its embedded status. The only way it can get it back is to close above 80 tomorrow and tomorrow only. If it does not get it back and remains un-embedded, then it is 'likely' price and the 18-day SMA will come together.

From the local count, it is very possible - even likely - to get a gap up tomorrow. If that happens, the question is how far does it carry, and does that measurement better fit with a downward expanding diagonal or a larger triangle that could point upward? So, we will have patience. (The local count from the end of the day can be found at this LINK.)

If, instead, there is a large gap down tomorrow, it might represent a significant failure move. And so, in addition to patience we need to be flexible, calm and attentive to the overnight markets for perhaps several sessions yet.

Have a good start to your evening.

TraderJoe

As Convoluted as the Impeachment Hearings

U.S. Debt Clock: $23.06 Trillion; prev $23.05
ES Daily Candle: Lower High, Lower Low, Lower Close: Trend Day
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Mixed
Daily Bias: Up (Settle Above 18-day SMA)

Prices appeared to start lower from the primary count provided yesterday. If there are questions as to the longer term primary count and alternate, please see yesterday's post.

ES Futures - Daily - Still Embedded

The ES daily slow stochastic had initially lost its embedded status during today's decline which was brought about by tariff news. However, the afternoon rally brought it back above the 80 level - thus, by the settle, it remains embedded, as shown above.

Using either futures or cash, there are ways to count the downward move in each as only three waves lower. And the afternoon up move counts clearly as five waves. So, it is possible - again - that only a diagonal downward or a sideways triangle is being made. Below are the waves made yesterday and today on the hourly chart.

ES Futures - 1 Hr - Three Waves Down

Today closed an hourly up gap on the cash market, and convincingly overlapped downward the up wave apex at 3,111. Additional waves are needed to clarify the fuller nature of the three-wave down move.

Again, so far, it looks like if we are starting downward, it would be via a diagonal. If there is further up movement, it would likely be via a triangle but there are way too few waves to assess either at this point.

Have a good start to the evening.

TraderJoe

Closing in on minute ((c)) = minute ((a)) - - Part 3

U.S. Debt Clock: $23.05 Trillion; prev $23.05
ES Daily Candle: Higher High, Higher Low, Lower Close: Yin-Yang Day
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Higher (Higher High, Higher Low)
Daily Bias: Up (Settle Above 18-day SMA)

In terms of measurements, we have shown this chart of a projection of minute ((c)) = minute ((a)) for several days. The Dow cash, S&P500 cash, and QQQ currently share these same Fibonacci length measurements.

ES Futures - 5 Hr - Minute ((c)) = Minute ((a))

Note that today's slight higher high occurred with a confirmed divergence on the MACD. This indicator has crossed below it's signal line to confirm the divergence. Still, the ES daily slow stochastic is still fully embedded.

IF today's top holds, and we still prefer to see price movement below 3,110 in the form of a downward overlap, then it is possible the Intermediate ((B)) wave is completed in the following fashion. 

S&P500 Cash Index - 2 Day - Intermediate (B)

In the above example, then note that the triangle is the Minor X wave. Please also note that the minute ((e)) wave of the triangle does not end exactly on the ((a))-to-((c)) trend line - just as Neely indicates it should not. Also, note that the move out of the triangle does appear like a single "thrust" out of a triangle. If today's top holds, that remains our primary count. 

In the event that there is a further higher wave, then this alternate, below, would best apply.

S&P500 Cash Index - 2 Day - Intermediate (B) ALTERNATE

The alternate is offered as today's price movement down was small. That could change. In the case of the this second chart, the triangle is a minor B wave with the same characteristics. Why such uncertainty regarding an alternate? Well, that is the nature of corrective waves in wave theory. There is nothing I can do about such a level of uncertainty. If the market did not have some uncertainty, it would cease to be a market.

Have a good start to the evening,

TraderJoe

Closing in on minute ((c)) = minute ((a)) - - Part 2

U.S. Debt Clock: $23.05 Trillion; prev $23.04
ES Daily Candle: Higher High, Higher Low, Higher Close: Trend Day
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Higher (Higher High, Higher Low)
Daily Bias: Up (Settle Above 18-day SMA)

The S&P500 and the Dow continue to close in on a minute ((c)) = minute ((a)) Fibonacci measure, as below, noting that with today's higher high there is still divergence versus the MACD.

ES Futures - 5 Hr - Nearing ((c)) = ((a))

There is a way to count a possible top here in the futures, but we would prefer some improved confirmation by prices trading below 3,110 - the prior first wave high. They came close today - within a tick - but ultimately a full-on overlap can not be claimed. In the cash market, then, the S&P500 opened with a slight gap down, the gap was then filled, and prices ground higher, possibly in an ending diagonal, then lower and then retraced a bit. 

If the cash market heads significantly lower tomorrow, we might suggest that a diagonal in the futures might synchronize the two markets with a chart we have shown you previously, as follows:

ES Futures - 30 Minutes - Possible First Wave Down

We do not know that price movement will occur this way. Today's fifth wave up, 5 of (v), would be a truncation as shown by the red asterisk (*). We only offer it as a possible way to synchronize the cash and the futures market in a first wave down. But, it does appear the up wave shown as minuet (v) of minute ((c)) can be counted complete this way, and both cash and futures would align. The down wave to today's low was longer in price than any other down wave in the up sequence.

We will note that the daily slow stochastic is still embedded over the 80% level. So, again, patience, calm and flexibility are still needed in this count. Let's take it step-by-step and see how it goes.

Have a good start to the evening.

TraderJoe

Closing in on minute ((c)) = minute ((a))

Notice that the market paused each time at ((c)) = 0.618 x ((a)), and ((c)) = 0.786 x ((a)). Note, too, that the market is bumping up against an upper wedge trend line, and there is still divergence with the MACD.

ES Futures - 5 Hr - Nearing ((c)) = ((a))

Further, if minute ((a)) is a diagonal, as we first concluded, then all of minute ((c)) should not be a diagonal which it is not. So far, so good.

After charting the wave, above, I have added this one, below, as the shorter term count on the ES 15-minutes. The reason is slippery: be very, very careful of your degree labels. In the futures, the middle wave - now labeled as a very small degree second wave, 2, is too long in time to be a fourth wave. This suggests that brown wave x 1 is the extended wave in the sequence. And wave 3 should be shorter than x 1. And then, if 4 does not invalidate, then 5 should be shorter than 3, and the whole thing should form a wedge.

ES Futures - 15 Minutes - Extended x 1 Wave of (v)

Further, within wave x 1, then wave x ((5)) is the extended wave in that sequence. It is very, very difficult to count otherwise and agree with degree labeling. The retrace of x 1, being less than 38.2%, tends to argue for this count, as well.

Have a good start to the weekend.
TraderJoe

Pattern Looks Good

U.S. Debt Clock: $23.04 Trillion; prev $23.02
ES Daily Candle: Higher High, Higher Low, Higher Close: Trend Day
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Higher (Higher High, Higher Low)
Daily Bias: Up (Settle Above 18-day SMA)

The proposed triangle looked to have improved it's form. It seems pretty recognizable.

S&P500 Cash Index - Hourly - Triangle

Toward the end of the session it's possible price began to probe outside of the triangle. With tomorrow being a Friday, movement up and out of the pattern might be expected.

Have a great start to the evening.
TraderJoe

One legitimate Triangle

The cash market shows this pattern a little better than the futures.

SP500 Cash Index - Hourly - Triangle of One Form

Everything still needs to be monitored with flexibility and attention being paid to details. Other forms are possible within limits.

Have a good start to the evening.
TraderJoe

Into Minuet (v)?

Sorry for the late post. Was traveling today. Although all of minute ((a)) is a diagonal, there would be nothing wrong with minuet (v) - one lower degree - being a diagonal, too.

ES Futures - 2 Hr - Minuet (v)

The principle of alternation only indicates if minute ((a)) is a diagonal, then all of minute ((c)) should not be a diagonal. But, minuet (v) is of one lower degree, and, thus, may be.

TraderJoe

Minuet (iv)

U.S. Debt Clock: $23.02 Trillion; prev $23.02
ES Daily Candle: Lower High, Higher Low, Higher Close: Inside Day
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Higher (Higher High, Higher Low)
Daily Bias: Up (Settle Above 18-day SMA)

Yesterday, we said to be on alert for a minuet fourth wave (iv) that could precede the last waves upward in the Y wave of Intermediate (B). In today's comments, the case for a triangle began to emerge and was counted out in real time. Here is a summary chart.

SP500 Cash Index - 30 Minute - Potential Triangle

With the MACD going flat, and volume scarce, price opened down and made a three-wave a wave that filled the prior gap up, shown, and retraced very close to 78.6% of the prior up wave. Then another "three-wave-looking" wave began upward and retraced very close to 78.6% of the prior down wave. These are ideal characteristics for a contracting triangle. Will they last? I'm not certain, but I would have to point out that another possibility is a barrier triangle if the b wave wants to extend further in time and price. After that, there should be a similar c wave down, etc.

There is also no requirement for a triangle here, although one is usually seen. Because wave (ii) is a sharp wave, then wave (iv) could also be a flat wave, if the b wave gets up to 90% of wave a. This is all provided that yesterday's invalidation level of 3,054 is not exceeded lower, first.

Have a good start to the weekend. Get some rest, and remain calm, patient and flexible.

TraderJoe

Over 3,079

U.S. Debt Clock: $23.02 Trillion; prev $23.02
ES Daily Candle: Higher High, Higher Low, Higher Close: Spinning Top Candle
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Higher (Higher High, Higher Low)
Daily Bias: Up (Settle Above 18-day SMA)

In our Tuesday post, we said that if prices got up over 3,079 that the assumption of a fifth wave in progress was more tenable. We also said on Wednesday, that all the wave sequences did line up that yesterday could be only the minuet (b) wave up - but time was out. The two are mutually exclusive. The overnight tariff news took prices up over 3,079 and made an up wave that consumed more time than a minuet (b) wave could be allowed. The short term count required revision. The longer term count did not.

Here is the weekly chart with the potential levels for the Intermediate (B) wave of 1.27x (A) and 1.38x (A). Price popped the top of the upper trend line this week.

ES Futures - Weekly - Two Key Levels

On a daily basis, price ran up to the upper daily Bollinger Band at 3,097, and then started to sell off a bit, as you can see from the daily chart, below. From this chart, there has not yet been a single day close above the band.

ES Futures - Daily - Tag of Upper Band

The daily slow stochastic is still embedded, and price is still above the 18-day SMA. There is still no full-on reversal candle. Also interesting, no significant trend line from the October bottom low has been broken. Based on measurement, the count revision that makes the most sense, is the one in the four-hour chart, below.

ES Futures - 4 H - Nearing ((c)) = ((a))

It has been a bear of a count - one filled with trips and traps. For example, the potential expanding triangle shown in yesterday's minuet (b) count did not predict the last wave in the sequence to follow it. Therefore, it must simply have not been a triangle at all but the series of higher highs to make the first impulse, minuet (i) of minute ((c)). Nothing in the above chart says minuet (iii) of minute ((c)) is conclusively over yet. It missed a critical overlap by just 1 point today near the close. But, it could be over, and if it is, so be it.

P.S. I have tried counting as a pure impulse, and the middle wave winds up being "too short" as of today. Also, there is no 1.618 wave following the ((a)) wave.

So, the primary thing to note from the count is that this latest up wave is approaching ((c)) = ((a)).

Have a good start to the evening - and still - remain flexible, patient, and calm.

TraderJoe

Gap Fill - Almost

U.S. Debt Clock: $23.02 Trillion; prev $23.00
ES Daily Candle: Lower High, Lower Low, Higher Close: Yin-Yang Candle
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Higher (Higher High, Higher Low)
Daily Bias: Up (Settle Above 18-day SMA)

Today made a lower low day than yesterday, then struggled all day to try regain the high, but, as of the settlement still hadn't done it. All-in-all, prices have retraced about 62% from low to high. From what I can see, time has run out on a further minuet (b) wave upward, but downward acceleration is needed as better confirmation of the minuet (c) wave, downward, being in progress. Refer to yesterday's posted chart as needed. Might be good to watch the overnight futures tonight.

Today's downward move filled the last S&P500 cash gap, upward. It came close, but did not quite "fill" the futures gap - only tying the close of the close-to-open hourly gap.

Have a good start to the evening,
TraderJoe

Higher High, Poor Close

U.S. Debt Clock: $23.00 Trillion; prev $23.00
ES Daily Candle: Higher High, Higher Low, Lower Close: Yin-Yang Candle
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Higher (Higher High, Higher Low)
Daily Bias: Up (Settle Above 18-day SMA)

The ES futures were again higher overnight, and then were sold off a bit. The result was the higher high was never seen in the cash market: another one of those invisible waves, or perhaps part of a hard to describe "B" wave. With that in mind, today in the comments I published this count which keeps degree labeling in tact, and is still in accordance with the overall Intermediate (B) wave in the longer term count. Here is the ES 4-hr chart starting from the minute ((e)) wave of the X wave triangle from the daily chart, shown at the lower left .

ES Futures - 4 Hr - Minute ((b)) Count

This count places the expanding triangle as a sub-minuette b wave, within minuet (b) wave upward. This is one of the few locations a triangle can be located at (Four, B, X or Y). What we know for sure is that the triangle simply can not be located in a second wave position. Yet, being a triangle, it may immediately appear before the last wave in the current upward sequence.

Minute ((a)) reverts back to it's original position at the top of a the leading contracting diagonal - a diagonal pattern of which has been proven by higher highs following it. The reason that degrees are preserved, is that the sub-minuette b wave - the expanding triangle - is just shorter in time and length than minuet (a), the larger degree down wave. Further minuet (b), up, is shorter in length and time than the minute ((a)) wave, it's larger degree wave in the upward direction. The minuet (b) wave could be over with with today's ugly top, and possible truncation in the S&P500. If so, this count would then predict overlap with the minute ((a)) wave. In short, the minute ((b)) wave would be a flat wave.

If there is to be a higher high for minuet (b), it should occur in the next 8 - 12 hours to keep the degrees in tact. Otherwise, it could just fall unexpectedly lower. Today was the second time the ES futures hit the upper Bollinger Band and could not close above it. But, as it was, today's point loss was quite small, so the assumption of a fourth wave of c of (b) is still in tact. IF the ES gets over 3,079 in the after hours, then the assumption of a fifth wave upward becomes more tenable.

The chart link HERE shows how to keep the Dow (2 hr) cash chart in synch with the ES futures.

Have a good start to the evening.

TraderJoe

Debt and Stock Prices Ratchet Up

U.S. Debt Clock: $23.00 Trillion; prev $22.93
ES Daily Candle: Higher High, Higher Low, Higher Close: Trend Candle
Market Posture: Neutral-to-negative and Probing
Daily Swing Line: Neutral (Higher High, Lower Low)
Daily Bias: Up (Settle Above 18-day SMA)

ES futures prices gapped up overnight (which is a little unusual for the futures) and rose about 20 points. I don't suppose that had anything to do with the newly posted $23 Trillion in debt, right? Prices hit and exceeded the upper daily Bollinger Band as in the chart below. As soon as the cash market opened, they began a slow steady decline, losing about 10 of those points, and then drifted sideways to close off the highs.

ES Futures - Daily - Strike Upper Band

Again, it is "not often" that the futures gap higher. I've posted this chart so you can see when futures gap higher (as in July, and again in late October). Such gaps are often relatively quickly filled when compared to cash gaps.

With the Bollinger Band hit, one target has been achieved, and the so-called Smart Money often takes some positions off at the upper band. You may wish to review Ira Epstein's guidelines for what happens when price hits the upper daily band (see this LINK).

The immediate count will be better able to be resolved when and if we see if tomorrow is a "turn-around Tuesday". The local count of minute ((a)) up has become muddied by the slightly longer than expected wave today, but we are still in the Intermediate (B) wave. One question is whether the minute ((a)) wave belongs in the original location, and we are now in the minute ((c)) wave? Or - is it possible the minute ((b)) wave will form a large triangle of it's own. I'll be working on questions of this type over the next several days.

The daily slow stochastic has remained embedded, and price remains over the 18-day SMA or 'line in the sand'.

The Dow Jones Industrial Average finally made a new all-time-high, and closed above it daily cash 

Bollinger Band.

It is also worth noting that as the stocks market has made new highs, the daily VIX has not had a lower low since April. There is some divergence there - let's see if it holds.

Have a good start to the evening.

TraderJoe

Larger Minute ((a)) Wave

We said in our blog posts that the ES futures - which started out its latest minute ((a)) wave with a diagonal wave - could extend to an impulse (using that diagonal wave as a first wave). The daily chart below shows that larger pattern, again, the purpose being to extend Intermediate (B) to 1.27 or 1.38 times Intermediate (A).

ES Futures - Daily - Minute ((a)) Wave

It is possible for the minute ((b)) wave to come back to test the breakout point (or more, lower). Notice how our selection for the minor X wave, based on time relationships between W and X, resulted in the next wave sequence higher to be the breakout wave.

Below are two charts showing the counts on the shorter term intraday time frames for the Dow Jones Industrial Average, and the ES futures since the October low. Both can now be located as minute ((a)) at the same time, the Dow would be a diagonal, and could be a 5:3:5:3:5 diagonal in cash.

DJIA Cash Index - Intraday - Diagonal

The ES intraday chart below, shows it's leading diagonal as wave (i) of the sequence. Again, because of overlapping waves, and the lengths of  the waves, we could not count the sequence from the low to the October 17th high as an impulse. But, then, the rest of the wave is.

ES Futures - Intraday - Impulse

In both waves, wave (v) should not become longer than wave (iii), as wave (iii) is already shorter than wave (i). In the ES chart - as an alternate - we have tried already to count wave (iii) at the top, but that results in a degree violation where the new iv location would be longer in time than all of (ii), if (ii) were located at w, and iv were located where (iv) is now.

Based on the publicly available CNN fear/greed model, the market now stands at "80" or "Extreme Greed". This is a higher level than at the October 2018 peak, but it is not as high as the January, 2018 peak of 93 - 95. Other measures of sentiment such as "percent bullishness" are beginning to perk up, but are not near historical peaks at this time. Still, given the CNN warning, and the run-up in October, some pull-back in November might be expected.

Have a good rest of the weekend and a good start to the week.

TraderJoe