ES Daily Candle: Higher High, Higher Low, Lower Close: Doji Candle
Market Posture: Negative
Daily Swing Line: Higher
Daily Bias: Up (Settle Above 18-day SMA)
As the ES futures daily chart, below, shows. Today was a doji candle - a fairly large one. A sole one-day doji does not itself signal the weakness that one might expect from the three sentiment and breadth indicators we published yesterday. No, a follow-through down side candle would be needed for confirmation, and the more impulsive the better.
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| ES Futures - Daily - Doji Candle on Friday |
But, we seriously want you to look at the commitment of traders report under the price graph. This chart indicates the entire 33,553 contracts of open interest is being held in the "weakest hands" - those of the small speculators. Both the commercial firms and the large hedge funds have moved to the short side. The last time this happened was back in September and the extent of the market drop that time could be seen. If a similar drop happens this time, it would take us back to the level of support at the prior highs which might be the reasonable target for the minuet (c) wave of the minute ((b)) wave.
People keep saying, "we are making new highs". Yes, we are. But - in the chart below - look at where we are making new highs.
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| S&P500 Cash Index - Daily Close Only - Seven or more Closes on Upper Trend Line |
Given where these closes were occurring, was it any surprise that today was a mid-range close again right on the trend line? People keep saying, "the market is too strong right now", and "the FED is too much of a player". Well the FED was actively cutting rates and ending Quantitative Tightening in September, too, but that didn't stop that corrective decline.
The last chart is what the best count of the upward (b) wave is - still inside of 1.382 times the downward three-wave (a) wave.
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| ES Futures - 4 Hr - Inside of 1.382 |
Not only is price inside of 1.382, but the y wave might have terminated on the exact w wave parallel. Note that there is no strong third wave that goes over the upper boundary of the parallel, and note that the x wave overlaps the previous .a wave of w - a condition we like to see in double zigzags. Remember that the NQ futures made a new high at w, but the ES futures did not. The down wave sure looks like a five wave move, but it has yet to prove itself with a break of the lower channel boundary and an overlap on the w wave. Those are elements of price movement which a confirmation candle might provide - if it occurs.
As a result of the wave analysis, the market posture has shifted again to "negative". This is not to be taken as trading or investment advice of any type. It is merely an indication of what the wave principle suggests is the next directional move in the market. And, it is reflective of price having pierced the upper daily Bollinger band for a second time - with the band often providing a level of resistance to upward movement.
Have a good rest of the weekend.
TraderJoe
Morning TJ. I believe you can count 5 waves up from Oct 3 on ES and cash, with wave iii at approx 2.62 wave i extension. Also fits 8 fold path using 8hr and 3hr candles respectively.
ReplyDeleteAnd wave iv ending on Dec 3 as an expanded flat.
DeleteThen your 'c' of iv - which is 'supposed to be a sub-wave', and of smaller degree is larger than all of ii. And that seems to violate degree labeling principles. And further, your first sub-wave .i of iii - which is again 'supposed to be a sub-wave of iii' is longer in length than all of i, if you are claiming the 2.62 extension. Both of these factors violate degree labeling considerations, and I won't do it.
DeleteYes, both counts call for a top at this time, but it is what happens after where they differ. I have explained these degree considerations in the past. If you are calling a wave 'a lower degree' - it must be shorter in price and time than a higher degree wave.
...go back to the December 7th post at the link below for the best labeling of the up wave that follows degree labeling considerations.
Deletehttps://studyofcycles.blogspot.com/2019/12/best-daily-count-since-last-december.html
TJ
I think if you make .i of iii smaller it may work.. cash chart, but you get the idea
Deletehttps://ibb.co/ZTS5pHV
no sir .. then (iii) which is supposed to be a sub-wave is longer than all of the 'higher degree' wave i. And then you have two fives. I have one and only one count - and there are no degree issues in that Dec 7th post.
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Deletehttps://1.bp.blogspot.com/-Grt0BSzwLaY/XfAOrclibXI/AAAAAAAAIcw/v6pX8AD0C4cXUqLT6ApnLXatQNw1LXjIwCLcBGAsYHQ/s1600/ES%2BDaily%2B20191210.png
ReplyDeletehttps://1.bp.blogspot.com/-2CxBsVfEl3E/XfKwhmyO7KI/AAAAAAAAIdc/3nIEE-3eL_g6Yx9YxXDGCgUIv1Fz7ILHwCLcBGAsYHQ/s640/ES%2BDaily%2B20191212.png
Why do some charts show the big B as apparently having been hot last week, whereas other charts show a move down to 3000 then straight back up again?
Which one is it? Surely not both?
With your level of spamming of this site, you barely deserve a reply. Here again, you are taking the first charts - without a count - entirely out of context. They are intended 'only' to show the position of price relative to the 18-day SMA and the Bollinger Bands. That's all. The large (B)? is just a reminder of the 'overall' context of the up wave, and does not imply a position or price for the wave to finish. The later charts show the more close up count within the larger (B).
DeleteTrue, I didn't deserve a reply, so thanks, now I understand which is your count.
DeleteYou can delete this comment if you want to, but I have given you some worthy praise in the past year, as well as gently mocking your somewhat anal policing of comments. You're a boomer, you can't help yourself, but it is really funny to observe. Maybe try to be a bit more relaxed and forgiving.
As for the EW stuff, I really don't grasp any of it to be honest, but you and others have called tops earlier this year, and I don't know one single Ewaver who hasn't been wrong. It's a fixed market, barely a market at all, they jam it up up up and then they'll crash it, all at their whim, all to steal from investors/traders.
That is admitted by a Rothschild here, where he reveals enough about the next monetary system to show he's the real thing:
https://archive.md/qERv5
I will stop trolling you from now on, please forgive me for past behaviour.
Unusual things going on in the market, Commercials and hedge funds, the latter generally being trend-followers, on the same side of the trade is most atypical. One does have to wonder about the possibility of their both being incorrect, if only in the short term. I expect we will tag 3200 before a sustained directioial move, and I remain agnostic about direction...
ReplyDelete..were they wrong in Sept? Are you just being contrary and ignoring the evidence to hear yourself talk?
DeleteTook a quick look at COT data (Barcharts.com) for a few indices (YM,ES,NQ,QR). Commercials net short, Large Specs net long in all...
ReplyDeleteNo. As the Barchart chart above shows, the blue line is the one over zero in the ES. That is the "small specs". In the NQ, QR and YM the green line (large specs) is the one over zero. So, you are correct for all but the ES.
DeletePlease go back and READ what I actually posted T.J...
Deletehelp me out..what am I missing? In the ES, the large specs are net short; not net long.
DeleteNo they are not...!
DeleteI have no idea what you are looking at.
Fresh eyes here. What Joe posted is what the COT report says. Let's not forget that it's updated after Friday's close, retro to a Tuesday sample (per Barchart's specs), so it lags. The current positions probably won't be known until next Friday evening. Interesting that Commercials have been increasing positions in NQ since November.
Delete@Tachy .. I'm primarily looking at the chart posted above, ESZ19. I also ran it for ESH20 in case there was some roll-over affect I was not seeing, but I got the same result. Granted, it is 'very' hard on their charts to tell the 'blue' from the 'green'. Anyway, this is my last reply on this topic. Time for football now.
DeleteNot trading advice, but exited all long trades, including ES, on higher high, although 3200 target not quite hit.
ReplyDeleteBest of luck to everyone here, and be wary of calling tops...Mr Market will tell you when he's done. Merry Christmas and a Happy and Prosperous 2020!
game over for the b wave scenario? melting up towards 3500 ?
ReplyDeleteif so, the decline last year provided a major low, i assume a 2nd wave low...
For the first time in a while, there is a wave off of a high, that has broken the prior up wave in less 'time' than the up wave took to form.
ReplyDeletehttps://invst.ly/p4d3p
This 'might' be an acceptable place to begin a 'change in trend count', but the high would have to hold.
TJ
Double close key reversal on 15min.
DeleteThere is a new post for the next day.
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