Friday, April 3, 2020

Battle at the 18-Day SMA - 2

It should be abundantly clear from the partial daily chart of the ES E-Mini S&P Futures, below, that, for the last six-out-of-seven days, price has contacted the 18-day simple moving average (SMA) shown as the red curve. Today was one of those days.

ES Futures - Daily - Battle at 18-day SMA

Prices today initially traded higher overnight, then lower, but ended the session closing just under the 18-day SMA. With the close under the 18-day SMA, the local price bias remains lower.

Also on the chart, I have also shown the current SwingLine function since the Minor wave 3, low. This is the black line. Of interest is the portion to the right of the (b) wave. This portion of the chart has both a "higher high" and a "lower low". These are shown at  the arrows. This is a neutral pattern and not a trending pattern. A trending pattern would be higher highs and higher lows, or lower highs and lower lows.

However, with today's slight higher pattern the SwingLine has briefly turned up. This has a significant implication.  IFF (If and only if), there is a new low below 2424,50, before there is a new high over the previous wave 4 high, then this would turn the SwingLine into "Trending Down". Why? That is because there would be lower lows and lower highs and they would be under the 18-day SMA.

If this occurs, it would likely indicate with a much higher degree of confidence that wave Minor 5 was underway. Note that even if the current Minor 4 was exceeded higher, it could not start a trending SwingLine pattern higher, because then there would just be the current lower low, and then the new higher high - which is not a trend in the SwingLine.

Sunday-night to Monday-morning may help resolve the current neutral state of this indicator. Let's see how it goes.

Have a good start to your evening and to your weekend.
TraderJoe


29 comments:

  1. When you speak of the possibility of a new low below 2424.50, do you mean any price action below that would turn the SwingLine into "Trending Down" or a daily close below 2424.5? Thanks!

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    Replies
    1. Any price movement below that level that does not also then result in an 'outside day up'. So, not a lower low and then a higher high than today.

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    2. Thanks for the clarification!

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  2. Futures up tonight mean what for the count??

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  3. Replies
    1. That's my count too, although this mornings pop could be b wave within the larger B sell-off (to correct the A wave of 4) before we get the C wave rally to complete wave 4.

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    2. I'm in iii of c of 4 also.

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  4. I had 5 waves down from wave 4, and since sure looks like an abc to the usual retractment levels for a second wave, but that wave ii has taken more time than the first wave down. Is that a degree violation? TIA

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    1. i think I answered my own question by googling and finding an explanation of degree violations in a previous post from 2017. At the same degree, wave ii can be longer than wave i. Any guidelines to the time. i find that often wave ii is half the length of wave i. right now, if we did make a first wave down, then wave ii is longer. any thoughts would be greatly appreciated.

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  5. Good morning. This is what I see, so far, on the hourly ES ...

    https://invst.ly/qcyta

    TJ

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    Replies
    1. ..of course, the question is whether it meets resistance before making a new high.

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    2. fyi only - R3 .. Resistance 3 (regular classic pivot point calculation) is at today's high of 2,603.

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    3. TJ, can you explain how this fits into things? Is it possible 4 is over and we had minute i and this is minute ii? Also, would love your thoughts on time in my post above. Much appreciated

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    4. ..something like this is 'plausible' but I would like to see confirmation by trading below 2,560, first, and then a retrace that does not exceed the high.

      https://invst.ly/qcz88

      TJ

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    5. In https://invst.ly/qcz88 the move down just before i is greater in price than ii.
      Is that allowed in LD ?

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  6. joe, you had a "b" wave high for last year forecast, then we had the biggest fastest c wave crash in generations - - why are you expecting it to go lower - you already can count 5 down right from feb high?

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    Replies
    1. This remains a very viable possibility.

      http://studyofcycles.blogspot.com/2020/01/repeat-of-diagonal.html

      TJ

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    2. This would seem to be in conflict with the RUT and DJT which appear (to me at least) to be flats in potential 4th wave.

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  7. alternative view for the bulls - could the crash be wave e ?
    https://imgur.com/a/A0s2ijr

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    1. ..not likely, the waves in an expanding triangle 'typically' expand in time also. Thus, wave e should be longer in time than wave c. Wave c is 12 weeks. Wave e is now only 6 - 7 weeks. I will revisit that idea later but not choose to entertain it now.

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    2. the first wave off feb high is so large it would require a diagonal or we are going to see a 80-90% decline from ATH for that count

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    3. sure, its not my preferred ew count either since my expectations are bearish (driven from other indexes). Still waiting for the 5th wave down https://imgur.com/a/G4MXe0q

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  8. As b of B of 4 this uptrend has now qualified as a flat with the YM & ES having now retraced 90% back upstairs. Killer c wave back down can now commence whenever it chooses to complete B of 4. This count of course will cause severe whipsaw with 3 large moves to come before the bottom arrives. Specifically B of 4 down, C of 4 up and finally wave 5 down of the bigger C from the ATH.

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    Replies
    1. I agree, although iii of C of 4 is also very possible. Man, I hate B waves...

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  9. Hey Bill can you post a chart of this...thanks if you can

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  10. Looks like the origin of our 5 waves down to ((i)) of 5 has been exceeded to the upside.

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  11. Just adjusted the corrective channel a wee bit.

    https://imgur.com/sMWiQXE

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

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