Tuesday, May 19, 2020

Corrective vs. Impulse

Two charts are below. One is the cash S&P chart (cartoon of the Road Runner, meep meep, and Wyle E. coyote). The second chart is the ES hourly futures.

S&P500 Cash Index - 15 Minutes - Double ZZ to 1.272

This chart carries the original count from the bottom, and shows (y) at 1.272 x (w) to a pip. You can see where we labeled the ending diagonal. Today, Wyle E. Coyote was spinning his legs fast and furious to avoid dropping over the cliff. But you can see he made lower prices today before higher ones.

The next chart is the one of the ES hourly futures.

ES Futures - 1 Hr - Channel Count

Reasonable people can agree on these observations. You'll note the futures definitely did make a new overnight high. One very big question is, "Why didn't cash?", as in the cash chart at the top.

Next, you should take your Fibonacci ruler and verify that you can measure a near exact 1.618 extension of the third-movement upon the first in the futures. Is that 1-2 & a 1.618 wave 3? Or is that A-B & a 1.618 wave C? And why couldn't cash make a 1.618 extension, too?

A key inclusion in The Eight Fold Path Method is that 1,2,3 is the same as A,B,C until it is not.

So far, IF the downward wave stopped somewhere near this location, the chart could very well have alternation. It would be a flat for the second wave, and a zigzag for the fourth wave.

Still, we have shown that a typical fourth wave would generally retrace between 38 - 50% of it's third wave. That would put the lower limit at about 2,890. Below there and the odds of a true fourth wave get increasingly minuscule.

Will the fourth wave hold? If it does, an impulse might be claimed in the futures. If it doesn't then, the minute ((b)) wave count at the high might be the better count. Stay tuned.

And have a good start to the evening.
TraderJoe

36 comments:

  1. Looks like a 4th wave up is forming at 0.382R, unless the downward wave is subdividing. Patience & flexibility.

    ReplyDelete
    Replies
    1. H&S pattern looks to have formed with a target of 2890-91, which is the 0.500R of wave 3/C up from your second chart

      Delete
    2. This comment has been removed by the author.

      Delete
    3. at the 0.500R now, waves 1 and 4 overlap

      Delete
  2. There's also the possibility we shoot up and break the 2954 high

    ReplyDelete
  3. TJ -
    The origin of the cash diagonal is "b"on the 15th, correct?
    Thanks

    ReplyDelete
  4. We have an impulse in futures looks like it was wave 4- Joe's minute b model may be invalidated

    ReplyDelete
  5. Prices back over the 0.618R from the 3/23 (~2170) low

    ReplyDelete
  6. I read your analysis daily. THX for your work!!!
    It helps me a lot.
    Just saying....

    ReplyDelete
  7. We have exceeded yesterday afternoon's peak.

    ReplyDelete
  8. now its time to consider an impulse up from march low i believe

    ReplyDelete
  9. any thoughts on how high this impulse can go? I believe its wave 1 of a very powerful move upwards

    ReplyDelete
  10. VIX is not confirming this move higher, and $CPCE is extremely low. B-wave internals are hard to predict, but my guess is bull trap today.

    ReplyDelete
  11. As we know, in the overnight, the ES held the higher of the two fourth wave targets. Therefore, we use the exact same procedure on the smaller time frame wave.

    https://invst.ly/qvhk1

    Unfortunately, this site doesn't have a 10-min chart option - which would fit the number of candles better. But, so far, degree labeling is being followed as the first wave ((1)) of iii is shorter than all of wave i. So, it is a valid smaller degree wave. Note how difficult it is to tell precisely where the wave ii bottom is, as there is a possible truncated five-wave-sequence in the middle of the wave ii mess.

    TJ

    ReplyDelete
    Replies
    1. IF wave ii ended in 'the middle of the mess', then wave ((1)) is also shorter in 'time' than wave i; to also follow degree labeling.

      Delete
    2. Do you see this as coming toward completion of C up from March lows, or 1 of C up?

      Delete
  12. Joe has been incorrect with his model - we are in full impulse mode since the May 01st low. Get ready to break 3000

    ReplyDelete
  13. Regarding the chart above, a quick question:

    https://imgur.com/GCzABB8

    Thanks

    ReplyDelete
    Replies
    1. ..or it is the truncation of the down wave.

      Delete
    2. Your fib measure seemed to start from the lower low, so assumed thats where (iv) ended.

      Delete
  14. Looks like wave iv is started as the ((A)) wave down. Due to the mess at ii, it is hard to say where ((B)) will go. Also, could turn into a triangle iv.

    https://invst.ly/qviye

    Flexible, calm and patient. Especially you Mobes, or your posts will be banned. I clearly 'thought' ahead and showed the ALT B in red on the four-hour chart.

    TJ

    ReplyDelete
  15. I see today that Elliott Wave International adopted my count of an 'A' up, and a 'B' down as their best alternate instead of their "triple zigzag" upward to end the wave- although they have the degrees as Intermediate (A), and (B).

    I don't think there is a snowball's chance that an Intermediate (B) wave lasted so few days. Therefore, I think if we have seen the B wave low, it is only Minor B, and my wave degree labeling appears more correct.

    TJ

    ReplyDelete
    Replies
    1. If this upwave since the 14th is an impulse, would you estimate that it is the "a" wave of Minor B of Intermediate B? If Minor B was in the process of finishing now, isn't it pretty short compared to Minor A?

      Delete
  16. There is a possibility that with this new high we are completng 5 waves from march low. And i say this becase the last down move to 2790ish is exactly 38 percent retract of wave 3 making it a possible 4th wave.if that what it is

    ReplyDelete
    Replies
    1. I don't think so. Take a 4-hr chart, and see where 160 candles ends.

      Delete
  17. Here is an updated chart. The EMA-34 has been added. As you can see price contacted the lower channel line, and crossed the EMA-34 to the down side. Therefore, we have 'one way' a good fourth wave could be completed.

    https://invst.ly/qvjy0

    We also see that this wave iv is 'longer' in total length (top to bottom) than wave ii. Therefore, this must most likely be the fourth wave, and not a sub-wave of an extension. Only other optional fourth wave I see is a triangle, but that is in no way 'necessary'.

    TJ

    ReplyDelete
    Replies
    1. ..also while the EWO is not exactly at the 10% level, remember what was said earlier: this charting service does not offer a 10-minute wave which would allow the 120 - 160 candles for the EWO to go +10% or -40% of the third wave peak.

      TJ

      Delete
  18. Could be wrong but i see 5 wavea already made in cash..so futures may try to plqy triangle as it hasnt made a new high to work out some count whicn works for cash wnd future

    ReplyDelete
  19. Here's an updated chart.

    https://invst.ly/qvknh

    TJ

    ReplyDelete
  20. Here is a chart on this potential last wave up of this series. It is an expanding E-D which provides a very, very clear invalidation point. And that is one of the clear benefits of proper Elliott Wave Counting.

    https://invst.ly/qvkzr

    TJ

    ReplyDelete
    Replies
    1. ..now above wave (iii) without invalidation being hit, so far. Can still continue to exceed the futures high.

      https://invst.ly/qvlan

      TJ

      Delete