Monday, January 6, 2020

Call It Like They Measure - End of the Cycle

From what I can see, the potential diagonal scenario sketched out yesterday DOES shift the degree labeling problem to the upward waves. Those upward waves or their internals do become too long for their respective degree definitions. Please see the prior post if unfamiliar with the potential diagonal scenario.

And, if one tries to make an even larger upward diagonal, the problem gets even worse. 

Conclusion: The Primary and Cycle Waves upward have ended. The downward Intermediate (A) wave, and upward Intermediate (B) wave are correct. Any travel of Intermediate (C) that breaks the lower edge of the second blue box becomes Primary ((A)) down.

It is especially important to note in the Dow chart below where Minor 3 of Intermediate (5) ends. As a minor wave  - if labeled at the December 2017, top - it would become longer than the prior upward Intermediate Wave (3) - which is not allowed. As a large expanded flat Minor 4 provides alternation with Minor 2, and the waves retain their degree definitions. The 'net distance traveled' in wave 4 and 2, is thus made much more similar.

DJIA Cash Index - Monthly - End of the Cycle


In short, we said in yesterday's post that the waves in the diagonal proposal had to be verified in terms of degree. We simply could not in all good conscience find a way to do that. As a minor 2 wave, the Dec 24th (2018) low is not too long for the prior longest Intermediate wave, but it is too long for those prior Intermediate degree waves which are most proximal.

Therefore, the main count remains as it is. The degree has turned.

Both Primary ((5)) and the Cycle is over, as best I can tell. They ended at the October, 2018 high. Again, any movement of the Intermediate (C) wave below the trend line and the blue box is confirmation that Primary ((A)) of the next Cycle wave is underway. That is because the downward wave would become larger than the largest preceding Intermediate wave and must therefore become a Primary wave - a wave of one larger degree.

Best wishes to all.
TraderJoe

55 comments:

  1. Also maybe possible that intermediate (5) ended a primary ((1))? Then we would need to change the 2000-2009 to cycle degree? And we have (C) left to finish ((2)), or we might get more to ((2)) after (C).

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    1. Hi Erik .. I'm not sure, but I don't think so. From what I can see, I think you run into a problem with the waves up from 1932 if you do that.

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    2. Thank you Joe. I have similar doubt as Erik. If you look at the big cycle degree move, from 1932 to 1966, the up move is about 21x, from 1974 to 2000, the up move is about 25x, the current up move from 2009 is less than 5x. Given this numbers, I think the current move should be at least 1 degree less than the up move from 1974 to 2000. Therefore, the current up move should not be in the same degree as down move at 2009 bottom. What do you think?

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    3. Or we are ending the up move from 1974?

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    4. Why can't the short term trend change the long term trend? The large Elliott wave publications focus on the long term trend as the short term is changing.

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    5. @Redcloud 1974 - 2000 didn't 'finish' anything.

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    6. @Bill. I don't even understand this question. I wrote this post because many of my readers wonder what my somewhat longer term views are. The New Year seemed a good time to provide that.

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    7. Joe, thanks for the reply. When you say "1974 - 2000 didn't 'finish' anything", do you mean that 2000 top is cycle ((3))?
      Given that 1932 to 1966 is 34 years (a Fibonacci number) , would it possible that the up move 'finished' in 2008 and we are in another 34 years up move from 2009 bottom?

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    8. @Redcloud. No that is not what I mean. What I mean is the cycle finished in October, 2018.

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  2. Thank you Joe. Interesting scenario.
    I also see several Wolfe waves structures.
    One for ((A)), one for (( C )).in october 2021?

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  3. Really great work Joe, thank you so much.

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  4. Very nice work, Joe. Thank you!

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  5. TJ
    I think you are right on the money !!!

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  6. YIKES!!!
    This means we could get YET another manic primary B wave up to new highs before the "BIG KAHUNA" in the form of a primary C wave down. This lines up beautifully with the idea of the powers that be keeping the market aloft into the next election cycle. My head is already starting to hurt thinking of enduring a primary B wave after what we just went through with an intermediate B...Ouch!!

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    1. Some cycles that are close to bottoming now:

      solar cycle
      business cycle
      inventory de-stocking cycle

      Markets maybe know this, perhaps that's why they've remained elevated, so any sell-off imminently would be a good potential buying opportunity for the cycles to swing up again, albeit the growth cycle would be weak again.

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  7. Hi Joe,
    I found your blog probably 6 months ago and have been an avid reader since. I just want to say that I really appreciate how you go into the weeds in explaining how you got to your conclusions. I've been using EW for a number of years, but rely more on indicators and support/resistance levels for execution. Still it's nice to have a thoughtful second opinion to weigh against. Great blog, thanks!

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  8. Joe, are you saying that the Dow cannot break above 30,000 in this cycle?

    Maybe I should state that differently: can the Dow break 30,000 on this (B) wave?

    You're not saying that the (B) wave is done yet, are you?

    As always, thank you for generously sharing your knowledge and experience.

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    1. @Kelly .. there is no proof the (B) wave is done. The proposed count shown as the "New Years Speculation" at this link, shows how higher highs are still marginally possible.

      New Years Speculation

      But, it is 'possible' that the one more high in the channel will end it. I will cover that tomorrow.

      TJ

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    2. @Kelly - also. So there is no confusion - as the article above stated - the upward primary wave and cycle ended in October, 2018. This (B) wave is part of the new primary cycle lower.

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  9. Hi Joe -- when you get the time, perhaps next weekend or so, could you please examine support for this proposed impulse through Sept 2018, in light of your 8fold method and Step 3 in particular:

    Step 3 - locate the maximum value of EWO. This location is reserved for wave iii of 3 in an impulse wave. Note the value of the EWO at this location.

    My own tools are limited in terms of periods (I could only review this length of time via monthly bars), so you may have seen a way to support this call using a different period.

    Also ... my own non EW work does indeed 'like' the idea of a selloff soon, but it was (until today) ambivalent on whether it would arrive in Jan or Feb. As well as how deep it would go .... C of IV to 2100spx, or something more modest. It looks now like late Jan or early Feb for the next crack in the door. I'm favoring a more modest pullback as well, but I have less clarity there.

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    1. ..the impulse starting with which bottom are you referring to?

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    2. Looks like you are counting 5 up from 2009.

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    3. See the second chart in tomorrow's post.

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    4. Thank you for taking this on. I can't do three week periods with my charting platform.
      AND ... I'll need to think about this further. Lets see how Feb and Mar turn out! Ciao and good luck in C!

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  10. Great work Joe! Detailed in-depth analysis showing great dedication. Thank you so much and wishing you to be rewarded generously in many ways for helping us all here. I’ll ride the next B wave in the market as opposed to waiting for never ending end on the sidelines! I suspect that either way the b wave is stressful...

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    1. Thanks for the wonderful thoughts, Luc. You too!

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  11. Please forgive me if you've covered this (probably more than once, lol). In an ending expanding diagonal (falling for example), if 5 makes a lower low, but fails to exceed 3 in length, is the pattern failed and/or truncated?

    Also, thanks the follow up above!!

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    1. If it fails to achieve the correct length (5 > 100% x 3), then it is not even a diagonal, and probably some other structure like a double or triple zigzag.

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  12. I highly doubt the market is topping. There are some good entries for going long on many stocks.

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    1. Todd .. once again, this is not a blog about trading or positioning. It is a blog about counting the Elliott Wave. Any more comments about "going long..going short" etc. will be deleted.

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  13. Joe - I completely agree with your long term count, it's exactly the one I've been carrying

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  14. TJ if we want to give ge (b) of Y a chance to form would you use the net distance of the X triangle or would you prefer to use the length of the (a) and (c) down legs of the triangel to spot the degree change?

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    1. Since it is a barrier/running triangle the net distance is "only" about 100 spx points so it's quite a big difference which we use.

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    2. Hi Erik. My understanding is if the minute ((e)) wave of the triangle is defeated, lower, then the degree will have turned.

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  15. Pitched battle around SPX 3250. I suspect if the cabal cannot engineer another gap above it we will take out recent lows.

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  16. Shouldn't the peak of MACD be on 3 of 3, not x of 4 as shown? I thought that was a pretty common characteristic of 3rd waves.

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    1. ...or maybe my eyes are failing and the peak IS on 3 of 3. Hard for me to tell.

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    2. hi Scott... you did pick the right words, "pretty common". But that does not mean 'always'. Some bigger 'b' waves throw the fourth wave EWO or MACD over the prior wave 3 high. Nothing I can do about it: it's just the way it works. The end of the Cycle is a massive 'blow off' wave.

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  17. Momentum lacking for either a third up or down so it looks like we are in some kind of triangle....

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  18. I think we will see a S. C. Wave C down of 4 which Will surprice in the sense it will drop fast and very deep. 50 percent dwn. Am I being deleted b/c I am using the wrong form or for not compleyely agreeing with the concensus? I believe this is a top, nicely done! I do believe the wave count is not completely accurate.

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    1. If you continue with the Roman Empire nonsense and cartoon wave counts you will be spammed.

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    2. S. C. A down of wave 4 August 2015 from mid August 2015 spx has been in S. C. B up of wave 4. Irregular flat S. C. wave 4 landning at 1650ish Q1.

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    3. I Will stop with the Roman empire eventhough it is not nonsens.

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  19. Other indices appear to be waiting for NDX to complete rising wedge. Things a bit unclear as these side-ways moves ususally end up being consolidation with price breaking to the upside. VIX once again getting smashed....

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  20. Possible running triangle entered in down-trend so break "should" be to the downside I think....

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    1. Triangle likely, but not one that will break to the downside, IMO.

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  21. SPX futures. Am I alone (wouldnt be the first time, lol) in seeing our 4th wave up from Dec low having become a triangle? Now in 5th up. (30 min).
    Thanks.

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  22. A new post has been started for the next day.

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