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.
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| 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
Excellent detailed post yesterday and followup comments and post today. Thanks Joe.
ReplyDeleteWelcome Tom.
Delete"if the b wave gets up to 90% of wave (iii)" sould read "if the b wave gets up to 90% of wave a"
ReplyDeleteYes, thanks. I'll correct it.
DeleteIntraday follow up you have provided is very very much appreciated. Thank you.
ReplyDeleteTJ -
ReplyDeleteWe recently discussed Neely's running triangle variation relating to GDX. In looking closer at our discussion, I noticed something I believe requires clarification. Ive tried to present the issue and Neely's view.
Thanks
https://imgur.com/uMLoD2w
..can only say the rebuttal has the benefit of post-pattern behavior which I did not have at the time. So, if it's a triangle, you expect only one more leg down?
Delete..also, how do you 'know' you aren't just doing this?
Deletehttps://www.tradingview.com/x/nhSF8h66/
TJ
..there is greater than a 38.2% retrace to this wave - which 'may' be sufficient, but it might also make a larger flat wave. Very difficult to tell.
Delete..and at present wave 2 would have come back to prior wave ((iv)).
DeleteJoe, I know you don't entertain requests, but I have to ask. I see bitcoin as beginning primary 3. What is your take? Thanks whether you reply or not.
ReplyDeletehow did you rule in Primary 3, and not necessarily Primary C?
DeleteThat's the fly in the ointment. I lean toward 3 due to the impulsive look of what would otherwise be the B wave. Also I think there would be overlap in the c already unless a diagonal. I probably should note from the ATH I counted the B wave as a triangle.
DeleteHere is just something else to look at, depending on how much credibility you want to give prices before BitFinex, and before trading on the exchanges. In other words - should 0 be below the price structure? I don't know that answer to that, but there has not been downward overlap yet. I'm not a real big fan of crypto's, primarily because it is not clear what moves them other than fear & greed.
Deletehttps://invst.ly/ojk47
TJ
I considered that count as well and have no idea if zero should be zero or the initial low. Same problem with IPOs and the Ndx. Bitcoin could well be the tulip mania of the 21st century, is it over or just getting started? Thanks for the chart and commentary.
DeleteWave 4 at 3068, target for a bullish gartley, at open 9,40 h ?
ReplyDeleteES currently still on-track for potential wave (iv) triangle. Still must prove itself.
ReplyDeleteTriangles do indeed seem to be the pattern du jour; I think we have another one underway...move up out of it should be sharp following the E wave completion when I suspect we will actually see a sub 12.00 VIX print capitulation....
ReplyDeletePossible D wave of triangle should meet resistance at open gap...E down next?
ReplyDeleteBusted triangle in DJIA....
ReplyDeleteDow cash still 'triangle shape'; maybe it's waves are slightly out of sequence with 'a' at Friday's low, so maybe it's a 'running triangle' or maybe it will go on to form an ending diagonal. Much, much, much flexibility and patience needed near potential tops.
DeleteThe cartel must be making me jumpy with their constant pattern negation...
DeleteReaders of this blog may wish to be aware of this article.
ReplyDeleteComplacency Reaches a High
TJ
Possible b/d trendline for running triangle not looking too bad..so far...
ReplyDeleteClassic thrust from triangle pattern. How high...?
ReplyDeleteLooking for around 3111 area (basis cfd [forex]), fwiw. :o)
DeleteNew ATH for ES future and Nasdaq index.
ReplyDeleteWe could be now in wave (v), started at 11:00 pm EST after the completion of wave (iv) triangle. As an alternate, I think we could be still in a flat wave (iv) in formation, with "a" = the triangle discussed above, and "b" as a zig-zag today in progress.
Matteo, i may be wrong, but an 'a' wave cannot be a triangle, similar to the fact that wave 2 cannot be a triangle.
DeleteI guess you are right, thanks !
DeleteES is now making consecutives overlaping waves on a hourly scale. It could be a b wave starting from 11:00 am of yesterday (monday the 11th)
DeleteLooking at 30 minute SPX, MACD(5,35,9)divergences are really stacking up.
ReplyDeleteOver 12 days
DeleteKey now is gap from this morning which is being furiously defended. The bears need to decisively close it to trigger sell signal and so far they have not...
ReplyDeleteMy guess is that a barrier triangle in ES completed its e wave this morning around 9am. The (v) pop lasted until 11am, and we are in the process of forming an impulse down from there.
ReplyDeleteWave turns at the degree that we expect take no prisoners. My own suspicion is that the pause at the gap area severely weakens the immediate bearish case so I suspect one more ramp higher...
DeleteTachyon, you are probably right. Bears lost it at the close.
DeleteMore precisely, a new daily low to count five down...
ReplyDeleteSo to me it looks like ES triangle instead became a flat with an ED C wave. ES then when to print an expanding ED, which now broke to the downside in what is looking like an expanding leading diagonal targeting the wave 4 low area of 3070s.
ReplyDeleteThoughts?
Looked at the final wave up and tough for me to see an ED on that final wave up...
DeleteTook another look at the possible ED and it does indeed look like wave five is shorter than wave three...
DeleteFWIW, in addition to trying to decipher the specific probable wave pattern, I pay very close attention to where CB infusions occur. We have seen far too may initially impulsive looking declines get arrested after three waves down with price reversing and heading to new highs. My own view is that market price of late is primarily being driven by stealth "Not Q.E" so called. They clearly defended gap area from this morning and we know what that means, at least for the near term...
ReplyDeleteDaily infusions are having diminishing returns, all the while technicals are getting over-stretched and negative divergences popping up. A short term (at least) drop is necessary to allow buyers to buy at a more favorable entry point. It cant just keep squeezing up when the VIX is record short as the buyers have already all bought. After a dip, it's then to be seen if we have a final Z wave to ATH top of (B) or, if things get ugly, (B) is already in.
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DeleteI used to think that there were a lot of things this market "can't" do and had to eat my words. VIX has in the recent past remained at the bottom of its price range for months. Short volatility trades are now at historic levels. The negative divergences at all time frames have now persisted for months. We are in uncharted waters so nothing surprises me anymore...
DeleteWell said. Sometimes I wonder if EWT has a presumption of natural price discovery... The market at present seems highly engineered.
DeleteA new post has been started for the next day.
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ReplyDelete