Thursday, December 5, 2019

Err on the side of Five

U.S. Debt Clock: $23.10 Trillion; prev $23.09
ES Daily Candle: Higher High, Higher Low, Higher Close: Trend Day
Market Posture: Neutral-to-Negative
Daily Swing Line: Neutral
Daily Bias: Up (Settle Above 18-day SMA)

Yesterday we had counted three waves up - with the waves presented. Last night's overnight higher high in the futures, and the subsequent morning higher high in the cash indexes added an additional wave. As ugly as it is (chart below), we should err on the side of "five up" for this wave. Being so ugly, it might just be an "A" wave up. By ugly, I just mean the measurements are not quite correct. In particular, wave ((3)) came close, but did not meet or surpass 1.618 x ((1)). And then ((5)) is a bit shorter than ((1)).

ES Futures - 30 Min - Fifth Wave Up and 38% Retrace

After last night's wave, there was a quick 38% retrace - which is a sufficient retrace in price, but it might not yet be sufficient  in time. In other words a b/ii wave could take longer in time. By showing the time rulers, we are showing this up wave has already take more time than the the down wave. So, this should be a part of a corrective sequence upward.

But there are ways minute ((b)) could have another wave 'over the top' with a compound flat, double combination or other ugly ((b)) wave. Yet, this wave upward could also make a "deep retrace" wave characteristic of a diagonal that makes lower waves, instead. There are too many ways for the waves after a "three-wave-down" sequence to play out. For this reason, the count must absolutely remain tentative. We will count what we see only, until the situation clears a bit; predictions will be avoided. And the market posture has shifted back to neutral-to-negative because of the "five-up" sequence, as ugly as it is. At some point, there should be at least one more five-up sequence.

It would be nice to be more definitive - but those of you familiar with Elliott wave know that this situation occurs from time-to-time.

Have a good start to the evening.
TraderJoe

28 comments:

  1. Hi Joe, how would you interprete the growong divergency btw Transportation Index and S&P/Dow since early Nov. From my perspective this indicates a significant move down ind in very near future.
    Therfore, I wonder if the S&P or Dow can still increase prices. What is your pov here?

    ReplyDelete
    Replies
    1. It's an interesting thing to look at, but difficult for timing. You should take the time to plot charts of 1999 - 2003, $SPX v $Tran, and the same for 2002 - 2008 so you can see how for weeks and weeks and weeks the indexes made new highs as the $Tran diverged, sometimes quite significantly - sometimes less so.

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    2. Yep. The basis of DOW THEORY non-confifmation...

      Delete
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  2. Fibonacci

    3 down 4,5 up 6,7,8-13 down ?

    It all gets decided tomorrow 8:30 am ET Jobs Report

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  3. NFP blows the doors off. ES over 30 and climbing.

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  4. Things maybe lining up. 3 of c of y in gold and 3 of 3 of c of y in es.

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  5. It is a lot of fun when the CBs show their hand...!

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  6. Gold made a low under e wave of X.

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  7. Just fyi - SPX/SPY are now at 90% retrace or better, and so can be the "b" wave of a flat, or next impulse higher. Dow is not quite there.

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  8. I am not a good EW analyst but I am fairly good trader. I learned a long time ago that there is a world of difference between analysing the market and actually trading the market. TJ has made it clear the site is not about trading so we don't talk about trades here. Nevertheless, what the market did today should not have been a surprise to traders. It wasn't to me!

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    Replies
    1. You seemed bullish. So was I. I was simply trying to get you to keep an open mind to the POSSIBILITY of a corrective move up.
      You don't have to answer this if you don't want to...but did you actually trade your conviction that we would move higher?

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  9. BTW, I think Ad Hominem attacks on a public forum like this is infantile in the extreme. We are all here to try and learn from each other and just because someone has a different or contrary perspective is a silly reason to get personal. It was not my attention to offend you last night I just did not want TJ to get frustrated by people asking him over and over again to explain what he had clearly stated in his post, so I do aplogise if you thought I was giving you a hard time.

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  10. On one hour chart it looks like large three waves move down and up, all of the same degree, which means a larger correction could STILL be under way...

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  11. Cash looks about as bizarre as it gets, although there is a rather precise 2.618 wave, and possible alternation.

    https://invst.ly/oyw3w

    TJ

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  12. I was very confident the move back above 3100 was very bullish short term. The pattern has been well established. I was (and sill am) having a hard time trying to discern a good bullish EW count and sill remain cautious due to the clearly waning upside momentum and tepid volume...

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  13. Don't think I ever recall so many candles with little-to-no-range; they appear like a - on the chart. Everyone is just 'holding'?

    https://invst.ly/oywx7

    TJ

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    Replies
    1. ..smaller up channel now has it's first breech to the down side

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    2. There's a third marginal higher high, which could complete an ending diagonal - with good internal timing.

      https://invst.ly/oyx96

      TJ

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    3. The main reason it looks to me so weird for an impulse...

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    4. ..now below 3,149 making a lower low before a higher high, and a second larger breech of the lower boundary of the up channel.

      https://invst.ly/oyxyj

      TJ

      Delete
  14. If you are correct, price should swiftly return to ED's orgin....then some...

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  15. Does any one know if the failure of the cash session to match the last ES high perhaps was a technical signal the the cash session would eventually go on to to the same?
    I am not aware of any technical argument why that should be the case but I remember wondering about it at the time. Thanks for any ideas.

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  16. Lower highs and lower lows by the cash close on both cash and futures.

    ReplyDelete
  17. There is a new post started for the next day.

    ReplyDelete
  18. The simple truth about binary options which many of us do not know is the fact that it is mainly based on predictions. Without proper knowledge of what next can happen to the stock market, you are sure to lose your funds. That is why it is important to be tutored or mentored by a professional investor in binary options. During my weeks of being mentored by Mrs Patricia Morgan, I’ve learnt much and also succeeding in trades and was able to recover my lost funds. Feel free to contact her on patriciamorgan984 @ gmail .com for positive results or contact her on Whats App on +32460230365











    The simple truth about binary options which many of us do not know is the fact that it is mainly based on predictions. Without proper knowledge of what next can happen to the stock market, you are sure to lose your funds. That is why it is important to be tutored or mentored by a professional investor in binary options. During my weeks of being mentored by Mrs Patricia Morgan, I’ve learnt much and also succeeding in trades and was able to recover my lost funds. Feel free to contact her on patriciamorgan984 @ gmail .com for positive results or contact her on Whats App on +32460230365

    ReplyDelete
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