Tuesday, January 7, 2020

Tracking

At the first of the new year, I decided to post this potential topping scenario and it's close alternate - based on a potential ending diagonal wave to help burn off the new highs in the advance/decline line. The blue line is the actual. The red line is the projected. Click on the chart to enlarge it to see how it's tracking. Because it speaks for itself, I will have little commentary.

ES Futures - Daily - Projected versus Actual

I will say that so far price is under-performing a bit, which is interesting. But, at this time I do think wave minuet (iii) of minute ((a)) is completed, and we are now in minuet (iv). 

The alternate for the count is that Intermediate (B) finishes at the first high, where shown. In the alternate, the ((a)), ((b)), ((c)) would be completed since the October, 2019 low. Since the ultimate price differences are not that great, the main difference is in terms of time and the number of roller-coaster rides required.

Reader Pedro asked me to post a chart of the rise from 2009 to 2020, using The Eight Fold Path Method. Instead of a monthly chart, a three-weekly chart is used to provide the correct number of candles, in this case 167 which is the best fit for 120 - 160 candles.

S&P500 Cash Index - 3 Week - The Eight Fold Path Method

Nothing is changed in this chart. Both waves Intermediate (2) and (4) are clearly identified on the EWO by their respective approaches to the 0 line. If we assume that the higher high for the EWO is a third wave, then so be it. Wave (3) crests at the 1.618 extension in a contracting ending diagonal - both of which were called in real time. Within Intermediate (3) The divergence of Minor 5 from Minor 3 is clearly shown on the EWO. The same occurs in Intermediate (5), and is shown on the chart. The new wave (5) does not crest above the log channel as the third wave does, and this might be its primary tell-tale of any weakness.

The difference in the EWO for this chart is that the fifth wave doesn't diverge, right? Everyone has noted it. I am currently attributing it to this wave being the end of Minor 5, of Intermediate (5) of Primary ((5)) of Cycle V. Cycle V is currently the extended cycle wave in the sequence. Some fifth wave extensions that can be observed do not end on the expected divergence, like the 3rd wave extension shown in the example in the Featured Post does.

So now the market has higher highs and I can tell people are very uncomfortable with it. They don't like B waves, in general, and find them hard to handle. All I can say is, "look the at B wave for Intermediate (2). It's a very similar scenario - on a larger scale".

Note that in Minor B of Intermediate (2), the EWO also makes a higher high than wave Minor 3 - not shown for lack of room - of Intermediate (1). It's all a matter of degree and scale. Again, I think if you try to make the May, 2015 top Intermediate (1), then there is a huge new problem: an Intermediate wave would become larger than the size of Primary ((4)) at the 2009 low, and that seems like it would be bad form again. I could be wrong about that - and will be open minded. But at this point it seems highly, highly unlikely that a three-month down wave into December 2018 would correct a 10-year bull market. Wave Intermediate (2) was even much longer than that.

Have a good start to the evening.
TraderJoe


56 comments:

  1. Downward break in ES to bottom of trading range with battle moving to 3200...

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    1. Reports of rockets flying in Iraq. Strike on a airbase. Details sketchy.

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    2. Maybe target lower 3170 ES GAP. Our response will dictate how much lower. I pray for a quick and peaceful resolution.

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    3. Not likely. Ballistic missiles came from INSIDE Iran, so you know what happens next. I expect our salvo already on the way.
      Amazing how news and the waves so frequently co-incide...

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  2. VIX was a nice clue. 5 down off yest highs

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    1. Yep. It put in a triple bottom today. We likely see a gap past 15 tomorrow.
      If this is just a fourth, they will successfully defend 3200, and if not, certainly 3160. If both go in ES, I think we are done!
      If VIX does not hold above 15 tomorrow we head higher for at least one more wave I think.

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  3. Apparently, below 3185 we get a gamma flip, as I type 3182.

    Wave C, hello there!

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  4. Joe, assuming your count is correct doesnt that mean that after the C wave is complete that the market goes to new highs and we see another 5 wave advance? Also how low do you think the C wave would go? Thanks again.

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    1. No, it does not necessarily. It could, but it does not have to. ((B)) waves can be 90% in a flat, or more. The (C) wave should break the (A) wave low.

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    2. Been studying ew for 25 years. Joe's count is good. Best I've seen. Thanks

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  5. Dow YM futures have overlapped 02/12 high and broken the 0-2 trendline so this means ((a)) or (B) is finished?
    Or the ((b)) that I've labeled is pretty deep and bounced of support, so maybe that's where the ((b)) formed, at least on the DOW?
    It's interesting that the recent overnight down leg is shorter which keeps degree for this count if it wants to do ii and iv of ((c)).

    https://invst.ly/pfedc

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  6. Amplitude expansion. Interesting days ahead...!

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  7. Im thinking a 3 is complete in gold.

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  8. I'm more confused than normal.
    Is the tracking chart above the preferred count, or the ending diagonal terminating very very very soon from a few days ago?

    They have very different outcomes, hence my confusion.

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    1. The above count is the slightly preferred one for two reasons: 1) we have not seen a diagonal to end a major market high, yet. Although one is not officially 'required' it might help eliminate the problem with the advance decline line being at an all time high, 2) it has fewer 'degree' problems than does the "long term diagonal". But, the "long term diagonal" count can not be entirely ruled out yet. I'm looking for ways to do that -- in my spare time. Lol.

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  9. Here's a count up from the overnight low, using the 0 - 2 trend line.

    https://invst.ly/pfg8g

    TJ

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    Replies
    1. I wonder what macd looks like to that count.

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    2. Now, overlap on ((3))

      https://invst.ly/pfglq

      TJ

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    3. @Roy, that's a 15-min chart, best to go down to 3 min or 5 min to get more like 120 candles on chart to see where MACD is.

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    4. Thanks Joe, appreciate it.

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    5. (1) is longer in time than i

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    6. @C .. yes, ((1)) is the higher degree wave than i, as shown.

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  10. Amazing the volatility seen in ES did not blow up on-going vol compression in the cash session...I suspect that will soon change...!

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  11. Lol!
    Looks to me like attempt to gap price past 3250 was met with an absolutely brutal smack-down...way too funny!!
    Nice to know where the battle lines are drawn...

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  12. Daily CL below 18ma with big red candle. https://invst.ly/pfhpn

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    1. Zeberg is calling a top for crude and gold. He's anxious to see the bust get started.
      My (longer term) work says no, further rallies are ahead for this cycle.
      The AO posted above for crude says no test of zero line to date, suggesting a w4 low is still ahead. I'm going with that as validation.

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    2. @pedro .. you have to use a 12-hr chart to get the recommended 150 candles. If you do that you'll see the AO (or EWO) does not have a higher high for the third wave up. I've been fooled before, but I am just providing the information. TJ.

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    3. Appreciate that Joe/TJ. Not only is w4 ahead, but the w3 is too.
      Again ... one of the challenges that most of us face applying 8F, is that our charting platforms don't offer the needed range of periods. I've been told trading view may or does .... so I'll look into that.

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  13. Any theories of why ES and the cash session should break in OPPOSITE directions from the same consolidation patterns?! Most curious, although I must say cash did what I originally expected. Interesting that some theorists believe news has no effect on price...

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  14. What's going on ET? Are you seeing the overnight low as (iv) in the first chart, and now up in 3 of (v)?

    To reconcile with cash - would you see the Monday morning low as (iv)?

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    1. If you are referring to cash, then here is the cash chart. It's the same procedure, over-and-over again. While I don't mind doing this once or twice to answer a question, I simply can not be doing it over and over and over again. The task is for the site members here to do the analysis, and dig in to find the time frames that work. It is the only way to build your confidence, that the answer to the second question above is 'yes'.

      https://invst.ly/pfi9l

      TJ

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    2. Degree question. Is it possible that the current price action is seeking to complete wave one of (v) rather than all of (v)?

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    3. @Steven M ..yes, possible Steven, but not required. This is where it gets dicey.

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  15. The bears have made it quite clear they are not going to surrender the 3250 "Rubicon"...watch what happens next...haha!

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  16. Watch the index (futures) which finished a potential contracting diagonal after the bomb lows.

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    1. @C .. if one expects a further minute ((c)) wave to end Minor Y of Intermediate (B), then one should likely not see a diagonal here, except as a small part of the last fifth wave up. That's because minute ((c)) would be the final diagonal.

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    2. It's not ES. But I find it useful in timing for turns.

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  17. Looks like a fourth up underway. Unless we get some kind of extension, one more wave up...

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    1. ..how long in time is your two compared to your one?

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    2. I was thinking larger A,B,C, with impulse count for C up...
      Let me know if I screwed that up...!

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  18. Another three wave move up on hourly chart...B triangle, now four of C.....

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  19. If flag pattern is fourth, target is around 3280....

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  20. ES has the new ATH along with cash.

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  21. So far, the "ET Map" looks just about perfect. Thanks, Joe!

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  22. Just fyi - today's high is the R1 weekly pivot, and the R2 daily pivot (using classic pivot point calculations).

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  23. If not for that monstrous spike down in ES, it almost looks to me the running triangle not done...thoughts?

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    1. Could be an expanding triangle, with todays high as D and E now in progress.

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  24. no other blog or EW service comes close to Joe's analysis...simply extraordinary!

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  25. There is a new post for the next day.

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