Yesterday, we looked at the possibility of concluding the fourth wave up with a diagonal. But, we specifically said,
"We suppose something like this might be occurring with the Minor 4th wave, but it remains to be proven."
We even drew dashed lines on the chart to indicate that their positions (especially the lower one) was flexible. With today's lower low day, the diagonal possibility was both disproved and formally invalidated. We let readers know in the comments when it did invalidate. The lower low day showed virtually no 'inflows' into the market on the first day of the month. It turned the Swing Line lower, and again set price below the 18-day SMA, or 'the-line-in-the-sand", thus setting the daily bias to negative as well.
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| ES Futures - Daily - Swing Line and Bias Down |
What set the market on edge overnight was the revised expectations for the virus. Buyers pulled their bids on the news.
For those wishing to know how the fourth wave ended, as I noted in the comments, I could only conclude that price finished the upside five-wave move with this ugly, but legal, triangle.
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| ES Futures - 2 Hr - Ugly Triangle |
Price is now below the e wave of that triangle, and also traveled below the c wave. And, hopefully, this example will serve to show another reason why triangles and diagonals are "cousin" patterns. The three-wave sequences in each can be interpreted for either, until one or the other is proven.
Well, let's see how tomorrow goes. Have a good start to your evening.
TraderJoe
ET, With great respect, I am asking why all the rule breaks.
ReplyDeleteIn the above chart there is less than 90 candles on the chart, moving to the 1 hour for 150 candles the 4 is to deep on the EWO.
The count of the recent high being a four with how high the EWO is on a 4hr and 8hr makes no sense to me.
Again, with great respect, what am I missing here.
Maybe I should be using the e wave location as the EWO marker in a fourth wave?
DeleteYes.
DeleteLikely minute ((i)) of Minor 5 at the lows. Wave minuet (iv) appears to have been a double combination (w-x-y) with a failure y wave.
ReplyDeletehttps://invst.ly/qblx6
TJ
Thanks for the update Joe
DeleteWhy isn't that minor 5 down a C wave of either a B or even a ii?
Delete@Kevin. I never said "isn't" or "can't". I only believe I said look at the position of the potential resistance from the daily upper Bollinger Band, and from the 200-day, and 100-day moving averages. They make the higher high that you are seeking as iii or (5) "less probable" at this point.
Deleteyes joe timely for me...
ReplyDeleteA 1.618 extension upward on the first wave up has been made. A higher high over 2,523 needed for "five waves up".
ReplyDeleteIf the 4 works out, they say that last weeks move was a seven-sigma event which makes sense with the EWO not being able to hold +40.
ReplyDeleteWhat is a a seven-sigma event?
Deletesincerely
KAVI
.. I don't go with 'they say'.
DeleteI missed the date, I assumed it was recent to the posting. The event happened during the decline. Still interesting to note.
Deletehttps://www.zerohedge.com/markets/77-sigma-move-nomura-says-market-has-only-just-begun-staring-abyss
@BBR .. not to get 'wonky' with you; the 7.7 sigma deviation is based on the "Normal Curve", "The Bell Curve" or the Gaussian Distribution. Much more contemporary mathematicians like Nicholas Taleb (The Black Swan), and more importantly, Benoit Mandelbrot (The Misbehavior of Markets) have proven conclusively that stock prices and returns are not "normally" distributed. They 'do not' follow the bell curve. And bell curve statistics are not an apt description. Stock price distributions have "fat tails" - meaning a greater number of improbably large events than do normal distributions. Another person who noted this was Ralph Nelson Elliott. The improbably large events are "third waves", "C waves" and other 1.618 waves.
DeleteSo, once again, "normal" statistics (Guaussian Curve, Bell Curve) statistics are simply not applicable to the stock market.
TJ
The current three waves up almost reached 50% retrace. Is it unlikely that this is sufficient for a complete second wave because of how little time it takes?
ReplyDelete..that's the way to think of it.
Delete..and watch to see if "three" becomes 'five' or not.
DeleteUpdate on this count. Have a great day all.
ReplyDeletehttps://imgur.com/87kG5UB
I'd be careful of claiming an uptrend for a parallel channel which is not at least at a 45 degree angle. 'Possible', but less likely.
DeleteES 5-min "on overlap watch".
ReplyDeleteES overlap has occurred. So far, the market could not even impulse up, today. Upward structure possibilities would now be a) a diagonal for a more time-consuming (a) wave, or b) a double-zigzag. A downward structure for a larger upward wave could be a "flat", with the first three waves up today, as a,b,c up of (a).
DeleteTJ
This is all I see, so far: three waves in each direction.
ReplyDeletehttps://invst.ly/qbqat
TJ
..now tagging 62% retrace.
Delete..and c wave, down, tagged 1.62 x a wave, subtracted from b wave high.
Delete...now lower than 1.62 x a wave.
DeleteIFF (if-and-only-if) c were to become 2.62 x a, then the low would also be 90% of up move for the (b) wave of a possible flat. Remains to be seen.
Delete..in order to avoid degree violation, might have to be w-x-y to a (b) wave downward.
Delete..with w as the original a,b,c, lower.
DeleteHere's a revised channel. Neither upwards or downwards has been categorically ruled out. A full-bar or two break above the channel might spell an upward diagonal. Staying mostly in the channel as it travels lower might spell a (b) wave.
ReplyDeletehttps://invst.ly/qbqut
TJ
..Now up to upper channel boundary.
Deletehttps://invst.ly/qbqzo
TJ
..first channel breech to the upside, and back in channel.
Deletefyi - the Russell made a new low on the way down; far weaker than the ES
ReplyDelete..second breech of channel higher, and higher local high makes 'five-up'. Upward flat (i.e. to 90% or more from today's high) is now 'also' possible.
ReplyDelete..upward move needs to hold the 2,456 low.
DeleteES ..90% upward wave now attained
Delete..and now marginally over the high
DeleteA new post is started for the next day.
ReplyDelete