Tuesday, February 11, 2020

Uglier, But Still Legal

Today in the comments section for yesterday's post, we made a case that yesterday and today can constitute "four waves up". That gives us two clear cases for the potential ending diagonal count. The first clear case remains as was posted yesterday. and is repeated below.

ES Futures - Daily - Diagonal Case # 1

But, if today is only four waves up (see this chart at this LINK), and there is a higher high tomorrow, then there is a clear case to move wave (iii) two days to the right - to the high of tomorrow's wave. Then, perhaps there would be a deeper wave (iv) that might improve the proportionality of the diagonal. I'm fine with that if it happens.

Also, the chart in the link shows several interesting items: 1) it shows wave 1 at 12 candles, but 2) it shows wave 2 as 48 candles! This is 4 = x 12 candles, showing that a second wave can be much longer in time than one might suspect. Four times. Wow! 3) It shows that the X wave at the top - when the FED Chair was speaking in Congress - was greater than a 1.62 wave up wave compared to it's W waves down, and yet, 4) a new low was made at below the low of the W wave. One well-known market analyst says this is impossible - his words not mine. Yet, there it is.

Again, so there is no confusion - if there is a marginal higher high tomorrow - perhaps as the FED chair speaks again, then this might become the more acceptable alternate.

ES Futures - Daily - Diagonal Case # 2

If a true daily diagonal does form, it would be quite ominous for the markets, as we have not seen a daily one form since October, 2018. The diagonal should mean - if it completes properly - it is the end of that particular wave. I have done studies on the daily (again using the ES futures), and this up wave 'should not' be counted as a five-wave sequence with a diagonal at the high - not and maintain 'degree-labeling' anyway. The reason is that today wave (iii) became too long compared to where wave (i) would be. Hope this helps.

Have a good start to the evening.
TraderJoe



28 comments:

  1. If we count the X triangle as a tripple ZZ instead, it means that a diagonal is allowed to form directly after, which solves the degree problem with current diagonal count where (ii) is bigger than ((b)), lets call (ii) ”((ii))” instead?
    The outcome is still the same though.

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  2. It would be atypical price action for a completed ED imho....I have a price target of 3415...

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  3. Looks more appealing as a c of 3 of the ES contracting diagonal.

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  4. ES futures can be seen to have completed the impulse up on the 30-minute chart. It's just a question of it there is a minor new high to allow cash to catch up.

    https://invst.ly/pu90o

    TJ

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    1. Once again, The Eight Fold Path Method proves it's use when the market is forming a true impulse. It is the difficulty in apply TEFPM to the longer term chart which indicates objectively to me we are either in Intermediate (B) as a W-X-Y or a very larger contracting ending diagonal for (5). Both counts are still valid, although like the 'X' wave, above, the (B) wave has cracked through 1.618 x (A).

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    2. Here is cash; 5-min (very short term) .. let's see if it forms alternation in its fifth wave.

      https://invst.ly/pu9hw

      TJ

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    3. Here's an update with tentative triangle trend lines.

      https://invst.ly/puac-

      TJ

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    4. Thanks ET. When we apply TEFPM to the longer term chart starting Jan 2019, it looks as if we may be in the 3rd wave of an impulse, wouldn't you agree?

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    5. ..the unknown account is not responded to. Please log in.

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    6. My bad, didn't realize I was logged out.

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    7. @RGTRDR ..no. To examine your question you have to plot a 2-day chart to get 142 bars, through today. I have done that. The up waves do not form a channel (at least as of yet anyway). And although price is significantly higher on what would be a third wave over the first wave, the EWO is diverging. So, as far as I can tell, the answer is no - at this time.

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    8. Thanks for elaborating ET.

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  5. AO triple negative divergence on 15 min. S&P 500 futures and it still won't let go: https://invst.ly/pubhk

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  6. Here's an update. A triangle shape is just barely holding.

    https://invst.ly/pubtu

    TJ

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  7. this is jack- cant log in at the moment

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  8. The latest up wave is now over 78.6%; allowing another triangle leg or possible truncation. Just remember a triangle is defined by its b-d trend line, not necessarily by it's 3-b trend line. So, this up wave can fail in a triangle now where-ever it likes.

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    1. ..the last down wave broke the 0 - ((2)) trend line in cash, likely validating a fourth wave. An e wave of a triangle might do more so.

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  9. Today's 4ht wave is as long as the previous higher degree 4th wave. Right now I'm looking at a diagonal finish from the Feb. 10th low in SPX., 30 minute chart.

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    1. Roy C. today's fourth wave violated nothing I could see in the ES futures .. 30 min. See below.

      https://invst.ly/pucv3

      These wave degrees look and measure acceptably to me.

      TJ

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  10. Downward wave finished as a truncated double-zigzag for alternation; futures have a higher high.

    https://invst.ly/pucm1

    TJ

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    1. ..since the downward wave 'did not' form a triangle that means there could be more to this wave (as in the continuing ending diagonal shown as the alternate, above).

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    2. ..using broker quotes, cash has the new high, too.

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  11. This would be a nice way to finish this wave. Either way there is overlap on ((1)), and the up wave would measure 5 = 1. (Very short term chart 1-min).

    https://invst.ly/pud84

    TJ

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

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