Friday, February 7, 2020

False Breakout

Readers of the blog will note I tried all day today to count an impulsive structure upward. See the last two days notes if you have questions. But, the amount of time this downward wave took exceeded the time of the higher degree waves. Further, today was a bearish engulfing day, and is a real warning sign to the bulls. Therefore, with the daily RSI sorely lagging, it appears the best count is, in fact, the ending diagonal count we showed just a few days ago in a previous post at this LINK.

ES Futures - Daily - Diagonal Count

A wave count of minute ((a)), minute ((b)), minute ((c)) could definitely be to the ending wave Minor Y of Intermediate (B) from the triangle Minor X wave at the bottom of October. We will check other structures carefully over the weekend. And, as an ((a)), ((b)), ((c)) count it would have really excellent proportions with both legs nearly equal in length.

And, we know a few things. Wave (ii) took about eight days, which means that wave (iv) should be shorter in time, say about 3 - 6 days.  And depending on where wave (iv) stops its downward travel, wave (v) should not be longer than wave (iii) in price. And, wave (v) should also be shorter in time than wave (iii), as well.

The signs are encouraging, but let's still take it one step at a time. Some downside follow-through is still needed.

P.S. This is the second post today. You may wish to read the first, if you have not.

Have a good start to the evening.
TraderJoe



49 comments:

  1. Joe....interesting options.My thoughts, because this last wave up had 4 gaps up,which signifies to me a exhaustion wave. I think the decline is a running wave. Also it fits with the BKX already completing wave 1 down and now starting a wave 3 down. The proof of the pudding is holding your bottom EDT line. I like your blog...nice and clean.

    ReplyDelete
  2. Now another of my observations. Could this whole ending wave be counted W,X,Y? wave W.your (1),X =a,b=a,(ii)=b.and (iii)=Y. just because the financials took the form of a 11 year corrective triangle. Maybe to weird. Thanks

    ReplyDelete
    Replies
    1. Now just looking at the whole wave. It might count W,X,Y,X,Z.

      Delete
    2. Fast, that would be 'too complex' after a triangle.

      Delete
  3. What abt abc..with extended b making new high now c down

    ReplyDelete
    Replies
    1. Possible as a way to extend wave (iii) only marginally in price.

      Delete
  4. what about the clear hanging man candle feb 6 followed by a down day

    monday better follow lower or ...

    ReplyDelete
  5. Here's my best attempt in counting an impulse. It works nice on DJI with extended ((v)). Same count on spx but ((v)) is a bit ugly

    https://invst.ly/psrlq
    https://invst.ly/psrl8

    ReplyDelete
    Replies
    1. No. In SPX, the b of (v) is longer in price and time than (iv), anywhere you place b, and as a sub-wave of (v) that should not be allowed.

      Delete
    2. As a flat net distance of b is shorter than both (ii) and (iv) of (v)?

      Delete
    3. ..but the time is longer than (iv).

      Delete
    4. yes but so is the time of the lower degree weekly X triangle also compared to (A)

      Delete
    5. no downward wave of the triangle (a), (c), or (e); which are the subwaves of the entire triangle exceed the Intermediate (A) wave in length or time.

      Delete
  6. And same count on Transports as well

    ReplyDelete
  7. If I watch diagonal it will be bigger one - https://imgur.com/a/dSw9kfK
    The option from the post does not work for DJ w3 is longer than w1.

    ReplyDelete
  8. A bit of perspective:
    This is an update to a chart posted prior.

    https://imgur.com/R3bLPbR

    ReplyDelete
  9. I keep talking about the Financials. Here is Goldman Sachs monthly chart. GS has a long history with China since they were the key investment Bank to facilitate China's Industrial revolution. President Nixon w/ the Chase Group and Treasury Secretary C.Douglas Dillon made the historic agreement...the rest is history. The Virus has already closed all the major exporting ports and production disruptions have already begun.
    The Chart shows a massive monthly EDT and wave E's will fail about 2/3rd's of the way up to the top TL. Five waves are clear and usually the thrust down out of the formation is swift.
    The Chart link below.
    https://i.postimg.cc/9QHfhwys/2020-02-08-1051.png

    ReplyDelete
    Replies
    1. My chart data shows wave B going lower than the beginning of wave A and wave C taking much longer in time than wave A. Allowable?

      Delete
  10. I think that may have been 4 from Jan 31 with the high coming on Monday. There is good potential for a small AD line divergence just like late 2018.

    ReplyDelete
  11. Re: all of 3 being above the 0-2 trend line.

    This has to be a guideline, not a rule. It can't work off the 2009 low.

    ReplyDelete
    Replies
    1. Not sure what symbol you are referring to. If it's ES futures, see link below.

      https://invst.ly/pt0gc

      TJ

      Delete
    2. 0-2 of (1), any cash index.

      Delete
    3. I am not sure what you are showing us, TJ. Your chart shows no break of the 0-2 trend line which implies that everything above the trend line is (3) and (4) has not occurred as yet.

      Delete
    4. @Bob_J; not when you go to Log scale. And there's the rub. See below.

      https://invst.ly/pt22h

      TJ

      Delete
  12. I suppose if 4 of (1) was an expanded flat it could work.

    IF there were a new high now instead of (iv) in the chart, would your count complete?

    ReplyDelete
  13. I found an embedded i-ii on 2/4 in SPX. From 3244.30 to 3255.99 there is a valid 5 wave sequence that can only be seen on the 1 minute time frame. i is 3249.52, ii is an expanded flat with 3250.75 as the B wave, iii is 3254.48, and iv is 3250.61 (overlapping B of ii but not i). This allows the high to be [iii] and the down wave to be [iv] which may not be done. https://i.imgur.com/gxGtFNW.png

    ReplyDelete
    Replies
    1. No. Because the second i-ii would break a line from the first [i], [ii].

      Delete
    2. Just following Elliott Wave Principle. Page 48: especially 2nd paragraph https://i.imgur.com/76aVfwg.png

      Delete
    3. No. It is your first [i], [ii], (i), (ii) that is the problem. Wave (ii) breaks a line for (iii) from 0 - [ii]. You started this by saying, "I found an embedded i-ii on 2/4 in SPX. From 3244.30 to 3255.99". That is incorrect, imho.

      Delete
  14. would not be surprised if we are working c of 3 of the contracting ending diagonal.

    ReplyDelete
  15. Yes, there is a 'possibility' we are still in (iii) of the larger daily contracting diagonal. But, if we have stated wave (iv) down, it 'must' count as a-b-c, overall. The 'a' wave could start as this expanding leading diagonal. There is already very clearly a 1.618 wave down in the futures.

    https://invst.ly/ptdd-

    The pattern would invalidate if ((4)) got higher than ((2)).

    TJ

    ReplyDelete
    Replies
    1. Here's a little more detail. The EWO is now showing the 'classic' expanding pattern signature, and there is now downward overlap on blue 'a'.

      https://invst.ly/ptehd

      TJ

      Delete
    2. Here's a further update -- very, very short term: they may be trying to make this as difficult as possible.

      https://www.tradingview.com/x/zJy67lbl/

      TJ

      Delete
    3. ..slightly lower low for ((4)), makes a better wedge shape. As a wedge, must hold 3,334 in ES futures on the downside, otherwise count 1-w-x-y. As a wedge upside target is 3,339 minimum (ES).

      Delete
    4. Last graphic update on this pattern. I think all should be able to follow it, and its invalidations now.

      https://www.tradingview.com/x/61mAE6eV/

      TJ

      Delete
    5. there is ES 3,339.50; minimum wedge target met - just a question now if it stays under the high.

      Delete
    6. ..marginal new high creates a new location for (iii).

      Delete
    7. ..sorry, above comment not accurate.

      Delete
  16. The breaks from these sideways consolidations keep heading in the unexpected direction...! Most interesing!

    ReplyDelete
  17. We have to keep the possibility that we are in 5 since low 3216ish...the more it stays resiliant

    ReplyDelete
    Replies
    1. ..sure, If the downward diagonal invalidates - above 3,350 ES, then that would be a good option.

      Delete
    2. ..the 1.618 wave down, in that case, would be c of (iv) .. but I'm going by measurements only.

      Delete
    3. ..ok .. downward diagonal invalidated.

      Delete
  18. I think you have to wait for 5 down from here to even consider counting downward. NASDAQ new high. This could be bull nest. 3580 spx 10000 ndx

    ReplyDelete
    Replies
    1. I was clearly looking to see if "five-down" 'would' form or not. It didn't.

      Delete
    2. agree mark
      i have been saying ndx ten thousand for months
      this is no B wave

      Delete
    3. ..not here you haven't, phil. Be honest or be gone!

      Delete
  19. A new post has been started for the next day.

    ReplyDelete