Yesterday, we said that in a trending market it is not a good assumption to assume price movement (in this case, lower) was over. It certainly wasn't for the ES E-mini S&P futures which went on (in the after-hours last night) to break the low and break the 3,100 level with some conviction before rebounding a bit.
We also said, that we hadn't seen a wave with enough upside to indicate that a correction had started, upwards. By the open this morning, we saw such a wave. See the chart, below.
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| ES Futures - Hourly - Correction Begun? |
Once we saw the structure of the three-wave move upwards - as a potential flat, we then waited until prices made another 90% approach to the low again. They did that in today's after-hours, as shown.
So, while there are never any guarantees, it is possible the market is making a larger more time-consuming flat (or other complex wave) as its full correction. Reaching the 90% level again makes a compound flat a legal wave by the rules of Elliott Wave analysis. We said, we have no need to break the rules as other sites might. We have no need to fudge. Every once in a while we WILL get a wave wrong, or a failure, or an unanticipated turn on a news story. But, we won't break the rules.
You'll note that the ((c)) wave of a-3 is larger in price than any prior wave, and so the degree of the waves should have turned upward. That does not mean that b-3 can not make a new low. It most certainly can, within limits.
But, the lower ((B)) wave of a-3 is telling. It is likely saying that the market is very weak and that - eventually - there is more downside to come. One tip-off was that the ((C)) wave of a-3 was only countable with a failure wave in it. And when that happened, we noted in the comments that today was going to be a mess and be weaker. However, one might begin to look for an eventual c-3 or c-5 wave upwards, the latter preferred to try to extend the correction in price.
It would be wise to see if the market can make a new bottom, and then cross the upper channel boundary as better confirmation that wave 2 is underway.
Until then, have an excellent start to your evening.
TraderJoe
Superb analysis today,Joe.
ReplyDeleteThanks Roy. Hope it helps.
DeleteGreat work as always! Is there any way that red circle v could be the first wave of an ending diagonal if there isn't sufficient buying pressure to correct yet? I can't tell if the waves since would potentially support that or not. Seems like it would be a stretch...
ReplyDeleteIt's a good alternate, but it would be very non-proportional in terms of typical retrace percents (i.e. at least a 50% retrace for the second wave.)
DeleteFurther new lower low in the A-H.
ReplyDeleteHi Joe, and thank you as always. So if this is an irregular or expanded flat (since B is dropping below the start of A), is C expected to reach higher than A? (One source said that was the case). Most sources also say that wave 2 reaches the vicinity of wave 4 - targeting a .382-.618 retracement. Is that required or might is stop at the current .236?
DeleteI am a little embarrassed to ask silly questions and waste your time, so even a point in the direction to look would be greatly appreciated. Thanks
It looks like there was another little running triangle before that last low.
DeleteThanks Joe for all of your hard work and persistence. Today I will add that this is the 3rd day in a row...(please correct me if wrong) that there is trading outside of the Daily Bollinger Band.
Delete@eyes .. as I said; nothing starts until price is above the channel. Then, the usual targets are a-3, 1.618 x a-3 and 2.62 x a-3, when added to b-3 in that order.
DeleteTJ
Thank you Joe! I think I finally understand...it's premature to think of targets until there is confirmation that the (proposed) labels are correct. I was jumping the gun - thanks for helping me understand that. :)
DeleteI need a lot of fantasy to see iv triangle.... and I do not see it:)
ReplyDeleteThere is zig-zag higher then impulse lower.
Most likely we have this extended first wave - https://invst.ly/pz960
https://imgur.com/ZIyQ0Sb
DeleteI currently have 3 counts from the high bouncing around in my large head with a small brain. ET's, yours and all of this mess being a Contracting Diagonal from ATH. In the diagonal I still need a 4 to get to the sma 34. In your count I am having trouble finding the 4 in 1. ET's count the strength after the triangle in not very common. Diagonal count is invalidated at 3150.
Delete@Krasi .. pleased review the "Featured Post" (upper right on the blog page) on how to count an impulse wave. Your wave has "no alternation" in that neither wave 2 or 4 is different in overall complexity, or shape. Neither as a "b" wave that goes below the zero line. And you are ignoring completely where the gap is in cash. If you continue to post charts that make less sense from an EW perspective they will be deleted so my readers don't get confused.
DeleteOk, triangle is definitely more likely....
DeleteET does this looks like end of b-3 ?
ReplyDeletehttp://tos.mx/jLFeJzS
@EDT .. possible, but low must hold. And I would count it as I did in the live example, from yesterday's comments; (w)-(x)-(y) where the diagonal is c of (y). The triangle is b .. which I watched form in real time.
DeleteET, This was your idea out of the triangle.
ReplyDeletehttps://invst.ly/pyoii
Wondering if the whole move from ATH is not a larger fractal of the 1 in your above chart?
https://imgur.com/RtQWTw5
ReplyDeleteHow about this for 5? It has the right look.
ReplyDeletehttps://imgur.com/ni03zsl
A little bit of failure in here would keep it in the 1 hr channel.
Delete..looks like a clear non-overlapping five-waves in 4, BBR .. I certainly could be wrong about that, but that's what it looks like. In a diagonal, 4 'must' be a zigzag.
DeleteI hear ya, only way to make it work is if there is a little failure wave around 1 am.
Delete..still inside 150% downward from a-3 until 3,044; 200-day SMA at 3,051.
DeleteThe diagonal meassures pretty nice from here, Maybe ut means extended ((1)) from top?..
ReplyDeleteES ..just points away from the 200-day SMA at 3,151.00
ReplyDelete..there is 3,050
DeleteI'm sure that was a typo ET. Stockcharts has the 200 as of yesterday's close at 3045.
ReplyDelete..this is in futures Andrew
DeleteSorry, didn't think there would be a 100 point difference.
DeleteThis comment has been removed by the author.
ReplyDeleteIs that 5 waves up on ES from 12AM to 4:30AM?
ReplyDeleteES 30-min outside reversal candle, higher. Let's see if it sticks. Wave counting stop at 3,040.
ReplyDelete..candle reversed again, and did not stick ..wave counting stop hit. Something else is going on.
Deletejust fyi - ES 3034 is the 1.618 x a-3; otherwise diagonal possible or larger impulse.
DeleteIn cash it looks like 5 is extending. In iii of (iii) of 5 now I think.
ReplyDeleteThrow over on diagonal.
ReplyDeleteBB and ET how about the extended 5th with the diagonal shown by BB?
Deletehttps://imgur.com/a/T3l3y2M
I think (4) should be moved one fractal back to make (i) of (5) longer in time than (iii) of (5) to make the diagonal valid.
DeleteI am just not sure if within the diagonal (i) can be shorter in time than (ii).
DeleteBoth the larger diagonal and smaller invalidation is at 2980.5.
DeleteDo you still have higher lows on your AO? Could be revealing.
DeleteET, there is a lot of new information the past 6 days, can we glance at the larger picture?
ReplyDeleteAssuming this first move down will be 1 of 5 to come, and compare regular scenario - low of 5 at 2350 more or less, vs. crash scenario - low of 5 at 1800 more or less:
How would those fit in the larger count - 1 or A of something larger down, or a washout C from 2018? As of now, do you think 6 days ago best count was a B or 5 peak or is it even discernible?
So far, no candle is holding.
ReplyDeleteCash now nearing 1.62 wave 1 (3182 to 3108) extension
ReplyDelete3 of diagonal was .786 of 1.
ReplyDelete5 .786 of 3 is around 3007. (smaller diagonal)
Unfortunately, 1, 2 at yesterday's flat works. And a smaller i - ii, down. Degree wise it works.
ReplyDelete..so, from a degree standpoint, 1,2, i - ii is now hard to see. BBR's diagonal does work, though.
DeleteOne can make the case that there was another running triangle on es around cash open.
ReplyDeleteNot investment or trading advice 3006 is all Im giving the diagonal.
ReplyDeleteyour ED started at 3250 right? that would be a nice bounce
DeleteKAVI
One can make the case for both, one at 3250 and one at ATH with the 3250 triangle e wave smack in the middle of 1.
DeleteOne nice hammer on the hourly
ReplyDeleteUp a lot of the night. I need a break. Good luck all.
ReplyDeleteJust to reiterate, BBRider's diagonal is the best count at this time. Other counts produce degree violations as of 3,070.
ReplyDeletehttps://invst.ly/pzhvm
TJ
Impulse down seems near complete in multiple futures indexes. Matches closely with yen's own 5 waves.
ReplyDeleteI wouldn't be surprised if SPX puts in one more low.
ReplyDeleteIt is 'possible' at this point to make a larger diagonal, with some strict invalidation points.
Deletethis is moment of truth correct level/support if rally will continue
ReplyDeletelow tick 1 minute after post - will be excellent indicator for near term
Deleteok done. easy 1% in 20 mins. have a good day. same warning at this level.
Deletewithin a minute again - levels offer more guidance than counts - im posting this to offer an alternate use of EW - levels built on concurrence of EW primary and alternate counts. The variance from these levels lead the count - especially when combined with a shorter time frame analysis of impulse waves. 'im posting this to support the vlidity of EW but also to focus on how it is lagging indicator and subject to revision. I wont comment on this anymore and not interested in discussion. This is something that everyone should think about on their own if they care to. have a good day.
Deletevery seldom i have seen degree playout if this is straight 5 we should revisit the concept of degrees....and if you guys are right that this is diagonal then hats off to you guys-
ReplyDeleteIt is 'possible' at this point to make a larger diagonal, with some strict invalidation points.
ReplyDeleteabove ES 3,097.50, a larger diagonal downward would invalidate.
Deletewe could rally 100 points in sp500 from here - by end of day....
ReplyDeleteES .. one minute chart looks like a diagonal, up ward. Caution, nothing happens until LOWER trend line breaks.
ReplyDeletehttps://invst.ly/pzixj
TJ
alternatively i think it can be bull nest using wave degrees - must watch all 02 terndlines
Deletewould be big up wave coming on alternate count right about now
Delete..the problem is there are no down waves 'longer in time' than the up waves.
DeleteIn EWT do leading diagonals tend to retrace more since there wasn't the strength for a leading impulse?
ReplyDelete..sometimes, yes, for example in impulses. Not necessarily in corrective sequences where the leading diagonal is A.
DeleteES ..Trend line breeching now..
ReplyDeletehttps://invst.ly/pzj6k
TJ
Joe -AB C with ending diagonal failed 5th? is that possible off bottom?
ReplyDelete...'possible', only if you make B a FLAT, so it is longer in time than A.
DeleteES 1-min; this might not be right, it just uses the trend lines the market is providing.
ReplyDeletehttps://invst.ly/pzjfz
TJ
Now below wave ((3)) in more time than ((3))..
Deletehttps://invst.ly/pzjle
TJ
..in this case 'maybe' you get a right shoulder to a H&S about the size of ((3)), and then a move down and through the neck-line for a measured move.
DeleteRemember when you almost shut down this blog and forum due to the lack of feedback? Then I notified McVerry and he added your site to his inventory, and soon after boom ... today 77 and counting.
ReplyDeleteUgly as sin, and still could just be marc's a-b-c up too.
ReplyDeletehttps://invst.ly/pzjzc
TJ
ET, Your larger diagonal that did not invalidate looks technically more appealing how 3 would have a clearer 3 waves to it.
ReplyDeleteLets see if this plays out.
ReplyDeletehttp://tos.mx/mfQSVur
I cant get that to load.
DeleteFixing the link.
Deletehttps://pasteboard.co/IWF7A5k.png
I would think if the diagonal completed we would not be back in the wedge.
ReplyDeleteCalifornia is monitoring at least 8,400 people for the coronavirus
ReplyDeletehttps://www.cnbc.com/2020/02/27/california-is-monitoring-8400-people-for-the-coronavirus.html
Am in California ET, don't scare me :P. Yes ppl are getting worried here.
DeleteFalling wedge I think - just found your blog - fantastic work !
ReplyDeletehttps://www.tradingview.com/x/WsrRgYsz/
Seems to be playing out, we will have to see if it holds.
ReplyDeleteNow above 4th of c (ending diagonal).
https://pasteboard.co/IWF7A5k.png
4th of C exceeded.
ReplyDelete4th of c exceeded
Last candle where time taken to form the leading diagonal up is spent.
Deletehttps://pasteboard.co/IWFdq9p.png
In the next 5-minute bar, the time of the decline will equal the time of the rise.
ReplyDeleteBigger one looks nice as well.
ReplyDeletehttps://imgur.com/UuqUzjN
Down wave is longer in time than up wave. Still awful stuff. And now just past 78.6%.
ReplyDeletehttps://invst.ly/pzkig
TJ
..broke the local down channel?
Deletehttps://invst.ly/pzkoc
TJ
Little bit bigger diagonal on 1 minute just had throw over.
ReplyDeleteWhen do they roll out the rate cut?
ReplyDeleteMe trying to stay awake and count this.
ReplyDeletehttps://imgur.com/RqcEiCh
The first run off the bottom to 3070 looks like a clear impulse. That would lead me to believe todays up move was another abc and we get the final plunge and then some CB bs.
ReplyDeleteThis is taking to long in my opinion.
everybody looking for bottom now... but i have the feeling degree has shifted in a running corrective ... now in wave 3?
DeleteKAVI
..looks that way! wave 3
Deletethere you have your gap down in the ES ....
DeleteKAVI
Near textbook 5 waves down from 3182 cash. Only pending possible extended 5th now.
ReplyDeletePossible third wave down after diagonal. Nothing higher until above original channel.
ReplyDeleteCapitulation move imo, but we'll see.
ReplyDeleteWhere is PPT?
ReplyDeleteThis is awful. I have wanted this kind of move to happen for months and years, but not through a global virus that kills people.
ReplyDeleteThis was in the works, and it made sense as soon as I first heard news of it back in Jan. It's the only kind of event that can both give us C down and be fundamentally powerful enough to override central bank actions.
DeleteA new post is started for the next day.
ReplyDelete