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