Wednesday, January 1, 2020

New Year's Speculation

Here is an idea for you - as long as you accept it for only that. It is not to be taken as trading or investment advice. While this idea might seem either overly precise or overly complicated, it is based on the Elliott Wave principles listed below the projection/speculation. One way to look at this is that I do it at my own risk. Another way to look at it is that a person needs to have a potential idea for what could occur, and monitor deviations from the expected. So, without further delay ...

ES Futures - Daily Close - Projection/Speculation

Here are the principles involved in this chart. The chart starts with the current up wave from October 2019. Actual prices in blue continue through the end of December, and the projection follows in red.
  1. The Federal Reserve is still very active in the markets.
  2. The NY Advance-Decline line is still at an all time high.
  3. The most prominent structure in 2019 was a mid-year triangle.
  4. There should not be a diagonal immediately following a large triangle, by alternation.
  5. Therefore, the current up wave from October should resolve as an impulse.
  6. The current impulse should end minute ((a)) of Minor Y of (B) in January.
  7. There should be a 38 - 62% move down from the high for minute ((b)).
  8. Once the minute ((b)) is made, then, a minute ((c)) wave could be a diagonal, as ((a)) and ((c)) would alternate.
  9. For the diagonal, each of waves (i), (iii) and (v) should marginally exceed the prior high.

A diagonal structure would help maintain the 1.50 or 1.62 extension of Intermediate (B) on Intermediate (A). The three higher peaks of the diagonal would be around March 1, April 1 and May 1, or the employment reports those months.

Notice in the current up wave from October, we have not seen a triangle wave or a diagonal, yet. Typically, one of these two patterns precedes a major top. The diagonal should have good proportions within it. Three waves in each numbered leg should be pretty distinct, and the retrace percents within the diagonal should be substantial. The hardest thing to project will be the depth and shape of the minute ((b)) wave - if it should occur.

Have an excellent start to the New Year. Please don't blame me if the chart doesn't work out day-by-day. It is the best projection I can do, given the Elliott Wave principles available, and incorporating stock market seasonality.

Have a very good start to the New Year.
TraderJoe

21 comments:

  1. And Happy New Year to you as well!!

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  2. The market should quickly retrace all the gains made from 2019 since the short covering is basically over and the rally was on low volume. I don’t believe the market will make it a smooth exit for the complacent bulls. We have Brexit coming and Democratic primaries in Feb. Bernie Sanders winning/taking the lead will be a negative surprise for equities. Since 2000, the 1st quarter volatility and turning points for the markets is worth watching. Significant market declines occur in Jan/Feb as recently as 2018 and 2016. NASDAQ made a final high in Jan of 2000 and crashed 70% that year. 2008, wasn’t pretty for the bulls either. Maybe it has to do with even years? 1930 and 1932 saw significant declines and major turning points.

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  3. Absolutely fascinating how 3250 continues to prove formidable resistance in the cash session...do we take out 3200 today??!!!

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  4. The closing high in the Dot Com Bubble was in
    August of 2000. Jan 2020 is 233 months from there.

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  5. Cash new ath, futures not. Hmm. Negative divergence. Could it be that a minor little 4 c wave is still needed , januari 3th,before arriving at (iii) on januari 6 th? End then (iv) on januari 8th and (v)on Januari 10th,.

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  6. Looking for that elusive VIX gap...

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    Replies
    1. Until the wedge line of falling highs is taken out I think Vix isn't useful. We are still making higher lows.

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  7. Hi Joe, about the 0-2 trendline, in general, I thought wave 4 should be higher than the 0-2 trendline to complete an impulsive wave. What I read now is that 0-2 trendline must be a support only to reach wave 3. Sorry for not reading entire Elliott or Neeely books but I am studying. Have a nice 2020 dear tutor !

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  8. Replies
    1. Gut feeling mostly, but the top is in, or Friday.
      Then within 7 TDs, down to 2720.

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    2. VIX will print green PRIOR to top tick imho...

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  9. Happy new year Joe!

    If the next down move takes out 3150, would you say that B is in?

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    Replies
    1. Or 3070 needs to be taken out to rule out (iii) sub-divide?

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  10. Thanks Joe. Scenario gives a theory based on observed waves, an ending pattern and what would produce divergences.

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  11. ES has broken 3235.5 to the downside

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

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