The easiest way to explain what happened today is with reference to the daily chart of the ES futures below. Price gapped up overnight - as was expected in a continuing C wave higher (from yesterday's chart). But, the gap up actually "gapped up and over" a previous price gap shown on the price portion of the chart in the black circle.
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| ES Futures - Daily - Whip around |
Price continued to head higher until it ran into the upper daily Bollinger Band shown on the chart, and then, because a gap-over-a-gap would not have filled that gap, then, with the daily slow stochastic in over-bought condition, the "Smart Money" at least took some profits into the upper daily band. (They may have sold more aggressively, but they at least took some profits.)
Is the up wave enough for a C wave higher? It is. Is there any conclusive proof that price has started lower in a meaningful way. No. There likely isn't. Although today is a Tuesday reversal, and has the look of another weak gravestone doji, there is no confirmation. Even from the daily chart, such a candle should be followed by a significant closing lower candle to better confirm the doji. Secondly, a close again below the 18-day SMA and below 2424.75 would still be needed to even negate the current uptrending SwingLine.
If, on the other hand, price catches a meaningful bid on the 18-day SMA, then it is possible to make a more complex correction upward. Let's see how it goes.
P.S. I sent a copy of the potential large ending diagonal structure that may have ended in February to Todd Gordon at Ascent Wealth Management. That count, which none of their team has contemplated yet, is at this LINK.
Have a good start to the evening.
TraderJoe
IF that was the low half hour ago, then from the top down, c is about 1.618 a, making about .382 retrace of wave 3 from 2449 for wave 4 - just slightly larger than wave 2. Then wave 5 of big C should top Wednesday with small chance of making it to Thursday. My guess ~2850 - in between the .5 and .618 of the full drop.
ReplyDeleteThe ABC up from the low would only be a little more than half the duration of the full drop, so it could be a larger A or W.
Deletewhat are your estimates on major wave 5 lows?
DeleteThe next move down most likely would be either a very large C wave down hard or a smaller B or X while still within a larger ((B)) wave up since the March 23 bottom.
Delete2850 is too high a target. Around 2800 near the .5 retrace of the full drop is better, and then 5 of C up from the bottom would be .618(3). Ultimately, count 5 up from the wave 4 of C low in real time.
My sketchpad.
Are we going to pass the mar 23 lows for wave 5?
DeleteThe question of whether we go on wave 5 to new lows next depends on when and where the current rally ends. If here, and we start to slide, then the count would point strongly the bounce off the March lows are being an a-b-c of wave 4 (thus wave 5 to new lows coming.) However, if we move higher into the SP 2900-3000 area (prior wave 1,) then clearly the rally we are in now is not part of wave 4, rather the March lows should be labeled as something other than 3. An A wave would be more likely, then the rally to SP 3000 wave B, which would suggest we have another major down leg to come in C to retest and likely break below the March lows. However, the March lows could have been a correction ending move from where the next major bull move to new highs started. All fluid. All depends on how far this rally goes before it reverses, although wave 4, wave 5 dive next, is most probable IMHO. That's all my take on things, FWIW
DeleteThank you this is great insight. After yesterday's close is it looking closer to the wave 5 dump?
DeleteSince a was an impulse and b was a flat, I am on watch for diagonal for c.
ReplyDeletelol..see below.
DeleteGood morning all. On the hourly, 1) since a 38% retracement was made, 2) since the up count has all kinds of difficulties with degree labeling from the lowest low, and 3) since the down count certainly 'looks' corrective at this point, this diagonal for Minor C is suggested.
ReplyDeletehttps://invst.ly/qdyqy
TJ
Thanks ET, Best of luck to all today.
DeleteThe 5 wave rally this morning low a (i) of (v) of C to complete the wave 4 rally off the March lows? If so, bigger rally surge coming in (iii) of (v)
ReplyDeletefyi only - the ES up wave has reached 90% of the prior high. It might go over the high. It might not. If it doesn't then it is possible the B wave is a flat. It's just something to keep in mind.
ReplyDeleteThere's the new high. More evidence that that C wave might be a diagonal.
ReplyDeletehttps://invst.ly/qe1bs
TJ
A new post is started for the next day.
ReplyDelete