Wednesday, April 22, 2020

No Gap Fill Yet

Because of today's gap-up wave, and subsequent follow-through higher prices, we relabeled yesterday's three down waves as (c) = 2.618 x (a), making a minute ((w)) wave at the low. The SPY chart, below, shows this clearly.

SPY - 15 min - Double or Triple ZZ?

Remember, we are trying to count a Minor B wave downward. It can have literally any corrective structure. So, it could be a zigzag, a double zigzag, a flat, a triangle, or some ugly combination wave.

Thus far, we are labeling it as a double zigzag, and we will revise the channel on longer term charts. The minute ((x)) wave, upward, does not have to be over yet.

Yesterday, we noted "wave (iv) did not have to be over." Even though to the letter of the 'rules' it doesn't have to be over, yet, it certainly does not have the "right look". So, we are providing the revised chart as above.

The kind of count we are showing above flies in the face of those uber bears who were immediately expecting a crash - citing only "three waves up". With five waves up to minor A, we were only looking for a corrective wave down. So far, that is all that has occurred.

After the futures close I added this chart.

ES Futures - 4 Hr - Only 0.236 Retrace So Far
 

Have a good start to your evening.
TraderJoe

30 comments:

  1. Seems a bit premature to be scoffing or gloating. So far to me it looks like a broken upward wedge and now a retest of the broken trendline, shouldnt be long now before a serious break. Could i be wrong, of course! But not wrong yet! Would you at least agree the transports is 3 waves?

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    1. I'm not gloating about anything. I'm doing work. I added a chart after the close.

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    2. You have a lot of patients TJ.. catch a lot of snarky comments.. Your time and efforts are very appreciated!! Thank you

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    3. Agreed Rayburn. TJ's blog is my definitive go to place on a daily basis. Thanks TJ, for your tireless work and insight.

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  2. A chart was added after the close of the futures.

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  3. In the second chart, B should be at least as long in duration as A, so into mid may or later to complete, correct?

    Just white-boarding - IF B retraces 50% and C = .618 times A gets you a top just shy of 3k.

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  4. As of 7 CST ES looks to be doing one of these running corrections.

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  5. JoeM says "... B should be at least as long as A ... correct." Not sure if that is a rule or a general guideline. What we say however is B should be the longest correction in time and price. The previous biggest correction in time and price is circle ii on ET's chart. I count 28 x 4 hour candlesticks. Price correction was 209.75 points. Currently this correction is its 25th 4 hour candlestick 6hours after the cash market close. To at least match circle ii in terms of price correction the move down should be at least to 2675.25 (all numbers basis ES). Please remember if it is a B wave it is also allowed to form a triangle thus negating the need for a 200+ point drop.

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    1. The count presumes a double ZZ for the B wave.The purpose of a double ZZ is to
      further extend the prior move so the Y portion will not be a triangle.

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    2. Was thinking when we get to ((Y)) on the chart, that is a larger A or W of larger scale B.

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    3. Got it. I mistakenly assumed you were arguing that the Y could not travel 200 points from the top of X

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  7. AAII 50% bears can provide fuel for a rip.

    The count needs a review.

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    1. I agree with sentiment leaves plenty of room for stocks to head higher. My big picture count is the March 2020 lows was a wave C of 4, thus wave 5 underway. Wave 5 should see new highs. I've seen targets of SP 4000 for wave 5, though it ends when it ends.

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    2. Extreme bear sentiment and well past .618 retrace makes an imminent C wave down seem unlikely. I'm wondering if Tuesday's low was 4 of A from the bottom and this may be 5. If it hasn't already peaked in the X, then I would think it is grinding up in 3 of that 5 of A.

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    3. Kevin I have my eye on that count also but I would guess the P5 in that case would be relatively weak as in failure or marginal new high, as it would be mostly driven just by money printing and bear sentiment.

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  9. Both trendlines look valid. Still looks bearish either way but maybe we end the week full of hope and love. https://invst.ly/qjwla

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    1. Gilead news right as we tested the purple trendline :)

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  11. Possible barrier triangle starting at 12:46...Just after the large wave down?

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    1. Or it could be (a) down as the large wave due to Gilead a flat for the (b) wave and (c) down just about to start since that last wave seems to be 5 waves up for c of (b).

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  12. Daily S&P 500 futures is overbought but with a positive bias above the 18 period ma: https://invst.ly/qjyvg

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  13. Waves down tough to count. I think one could see 1, expanded flat for 2, and a 3rd down just getting started or an almost complete abc with some sort of b triangle. My EW acumen is weak, so I am leaning toward the latter based on VIX not acting as if a 3rd underway.

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  14. A new post is started for the next day.

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