Thursday, May 14, 2020

Interim Post - Minuet Wave (i)

With 166 candles on the current half-hourly chart, the Elliott Wave Oscillator suggests that the minuet (i) wave may be completed as a "bullish falling wedge". This is not a diagonal pattern, but a non-overlapping impulse.

ES Futures - 30 Minutes - Five Waves Down

There are definitely 'five-waves-down'.  Thre "third-of-a-third" is on the lowest trough of the EWO. The fifth-of-the-third ends on the expected divergence. The fourth wave may be a triangle. The fifth wave is currently on a divergence with the EWO. And, it is worth noting that the EMA-34 contacts every major numbered wave as expected.

On a one-time only basis I have added two charts, below, to the post to show a very clear example of the wrong way and the right way to count the very same five wave movement upward. The wrong way does not consider the elements required in degree labeling. The right way considers these elements, and more.

Wrong way and right way to count using degree labeling. In this chart, the supposed sub-wave of wave ((3)) whether counted as wave i or ((3)) or iii of ((3)) is too long, if wave ((1)) is the larger degree than i or iii.

ES Futures - 1 Min - Wrong Way to Count

And here is the right way to arrive at the same conclusion.


ES Futures - 1 Min - Right Way to Count

In the first chart, degree labeling says "one may not claim a lower degree sub-wave is longer than a larger degree wave". Yet, everyone counts this way. The second chart eliminates that problem because wave ((3)) and wave ((1)) are of the same degree, so wave ((3)) may be larger than wave ((1)).

See the comments below at 12:55 ET, and this CHART, as to how the "correctly counted" wave led to the correct conclusion in 'real time', where the incorrectly counted chart leaves one with two alternates and a lot more uncertainty.

Also, notice the overlap at the top?? Very, very telling.

Have an excellent start to the day.
TraderJoe

80 comments:

  1. If minuet (i) is done here then my guess is 2,875 for minuet (ii). The 61.8% short fib coincides perfectly with the fourth wave of subminuet iii.

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  2. I see 7 waves on the chart... maybe I can not count.

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  3. First breech of upper declining trend line at 2,805.

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    1. Well done indeed on nailing this move from top to today, good stuff.

      FYI, I think you meant 'breach' above, as in break.

      Good day to you.

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    2. Once more into the breach, dear friends...!
      Epic battle around 2800...?

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  4. Only if the low holds do we accept the count, as above. If it does not hold, then it is a FLAT for wave iv. Again, welcome to the world of 'real' EW alternates.

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    1. Subminuet ii was a FLAT, so doesn't subminuet iv need to alternate with it?

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    2. This comment has been removed by the author.

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  5. Is there any way to tell if 5 waves down as shown in the chart is a bear market impulse wave i, versus a correction ending (for the time being) C wave? Obviously there would be a big difference in the follow-on bounce, but is there a way to tip the scales in favor of one over the other?

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    1. At this stage only time will tell. If there is an overlapping retrace followed by a new low then that would imply we're still in minute ((c)).

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    2. I find them to be uglier. Sub waves look nasty, a mess in the middle of 3, etc. They often do not have a wave that has enough strength to get out of the channel.

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  6. On a one-time only basis I have added two charts to the post above to show a very clear example of the wrong way and the right way to count the very same five wave movement upward. The wrong way does not consider the elements required in degree labeling. The right way considers these elements, and more.

    TJ

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  7. I have been looking at the "right" vs "wrong" degree labels and must confess I am still perplexed by why smaller degree waves in the right chart still display greater displacement than those of higher degree. What am I missing?

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    1. ..you are trying to count 'backwards in time'. That is not how the market makes the waves.

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    2. If we are attempting to determine if we have a degree violation, we have no choice but to count "backwards". Perhaps I am not understanding what constitutes a violation as I always thought it simply meant that the same numbered wave of a lower degree, exceed in displacement that of the higher degree wave. In the example above the third sub-wave of wave one up appears to exceed the wave three of the impulse up.

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    3. Correct .. you do not understand. Put a wave label in your mind like (i) at the top of the count. Then, wave's v, iii, and i are all smaller than (i). Then, the sub-waves of v are all smaller than v (not labeled), the sub-waves of iii are all smaller than iii (not labeled), and the sub-waves of i are all smaller than i - labeled as ((1)) - ((5)).

      Let it stew around in your head for a while. Ultimately, you will see why this 'must' make sense. You have to remember that 'nothing' in Elliott Wave says that wave three 'has' to be that longest wave.

      Maybe that will help you understand why so many Elliott wave counts are wrong. Few people look for x1, or the x5. They are only looking for the x3. By 'definition', if the first wave is the extended wave, then it's sub-waves may definitely be longer than wave 3 which would not be the extended wave.

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  8. So you are suggesting its a Ld as there is overlap. Thks

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  9. ET, Thx for the added examples. I need to work on this.

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    1. ..very welcome BBR ..! And thanks for hanging in and being so supportive all these last months.

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  10. ..and there is the new high, proving out the conclusion - even on a 1-minute chart - that 'correct counting' leads to a correct conclusion. The original 'wrong counting' chart leaves two options: we might go over this high, we might not. The 5:3:5:3:5 diagonal in the 'correct counting' chart leaves only one possible conclusion. We 'must' go over the high in some fashion.

    https://invst.ly/qt368

    We did.
    TJ

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  11. Here are the same 'exact' set of principles applied to the next wave up.

    https://invst.ly/qt3s4

    Notice that wave ii is the 'longest correction in time' up to that moment in the wave - as the wave was being formed. It 'must' be the higher degree wave. And also notice the Expanding Leading Diagonal at the low. People hate these diagonals (and triangles). They should learn what value they 'do' have.

    TJ

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  12. NOW, this chart shows precisely WHY 1,2,3 is the same as a,b,c until it is not. When you have x1, that means that 3 is shorter than 1, right? Well, how can you possibly tell an impulse from a zigzag until or unless there is an alternating fourth wave (flat or triangle?) to alternate with the wave ((2)) sharp?

    https://invst.ly/qt45n

    It is very, very difficult - some people probably have some very good indicators for this - BUT, don't miss the larger point. 1,2,3 and a,b,c are the same until there is an alternating fourth wave and then a fifth wave that follows.

    TJ

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    1. Excellent! There is now downward overlap on ((1)) or red a. Does that mean that further upward movement is impossible? It does not! Since ((3)) is shorter than ((1)), there could be more of an upward impulse ONLY if wave ((3)) is i, and the next ii remains shorter than ((2)). If a downward ii becomes LONGER than ii, only then can we say the market is not impulsing upward because then it would break degree considerations. (In which case an upward larger diagonal, or multiple zigzag upward is possible). But that is all in the future.

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    2. ..if a downward ii becomes longer than ((2)) .. typo; sorry.

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  13. Good stuff. But could this also be 1 2 i ii... and how does one build a trading strategy around it

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  14. NOW look at the TIME for the supposed smaller degree wave i, or red c. It is 'longer in time' than ((1)) is it not?? Should it then be a sub-wave of a larger wave? It 'should' NOT.

    https://invst.ly/qt4gr

    TJ

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    1. I am trying to help everyone see - as I posted verbosely in the last few days - almost no one looks at volume and TIME.

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  15. ET in relation to price, time and adherence to degree would it be correct to say the following:

    Wave ii of Minuet (i) was 49.5 pts (2889.75 to 2939.25) and took 24 hrs and 50 minutes to complete. Minuet (ii) has already exceeded the length of wave ii of Minuet (i) having moved 72.75 pts (2760.25 to 2833.00). However this would only be wave a of Minuet (ii) with the market now working on wave b. Minuet (ii) should also be longer in time than wave ii of Minuet (i). Therefore after starting at 10.00am today (Thursday) Minuet ii should not conclude until after 10.50am tomorrow (Friday).

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    1. I don't think we have completed subminuet a of minuet (ii) as only three waves up have been counted so far, unless it is a 3-3-5 FLAT. More likely that minuet (ii) has already completed.

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    2. ..please see the 2:54 PM comment, below (14:54 ET), regarding further diagonals or multiple zigzags.

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  16. And, blammo, there you have it. The new downward wave is longer than wave red b. We can now eliminate an 'impulsing' up count. The downward wave can be counted as another five-wave expanding leading diagonal. It's wave (5), according to these quotes is already longer than it's wave (3), validating the diagonal. It 'appears' to be a 3:3:3:3:3 diagonal.

    https://invst.ly/qt4v4

    So, upward movement 'still' can not be ruled out, but larger upward movement can now only come in the form of a larger upward diagonal - remember these are only 5-min waves - or in the form of a multiple zigzag upward.

    TJ

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    1. ..and now, here, as a cross-check is the Volume relationship between red c and red a. If you have a good trading platform, you can check the volume in real time.

      https://www.tradingview.com/x/vv7tM3Yc/

      TJ

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    2. ..now this is the hard part, that takes stops. You have to remember that the equal-and-opposite alternate for that expanding diagonal downward, because it is so small (but bigger than red b) is that internally it is JUST it's expanding triple zigzag or w-x-y-x-z; and that means it 'could' just be an X wave overall, if we are going to make a multiple zigzag upward. It 'could' be a leading 'a' wave down of a larger correction, and TIME would suggest that it is, but stops placed over the high would 'rule-that-in' or 'rule-that-out'.

      This is not trading or investment advice. It is a practical way to count waves. Counting waves 'does not' eliminate risk. Counting waves 'properly' helps reduce risk.

      TJ

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    3. ..and by-the-way, that downward wave is bigger than red b in both price and 'time'.

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    4. OK. price - as far as I can tell - just went over the high. But, we are not surprised by it, are we? We had a plan for it 'in advance' right? The small downward wave appears to be an 'X' wave - perhaps of a multiple zigzag, upward.

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    5. ..the new larger count becomes, as follows:

      https://invst.ly/qt58b

      TJ

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  17. so is minute ii almost done now? We didnt hit the resistance of 2900

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    1. no..need to make a,b,c of ((y)), see the above count

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  18. We're perfectly set up for a further rally tomorrow to ~2,875 and then a gap down over the weekend to kick off minuet (iii) of minute ((c))

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    1. Rusty..that is just 'one' good possibility. But you can't say that determinedly, just yet. If the upward wave ((y)) stays 'shorter' than ((w)) it 'might' just make wave three of a 'larger' upward diagonal for a larger 'a' wave up. Today is only Thursday; not Friday. Then, there could be a break for a larger 'b' wave down, to be followed by a 'c' wave up to end minuet (ii). Be open, flexible and calm. Count the waves; watch the volume.

      TJ

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    2. So based on your present count we are completing a of y. Asian session should bring b. And then perhaps c. Will keep an eye

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  19. Recap of what was presented today.
    1. Minuet (i), down, was counted to be over.
    2. We showed how to 'properly' count five-waves-up using degree labeling.
    3. We showed how to consider both 'price length' and 'time length' of degree
    4. We showed how the 'correct count' of the five-waves up, led to a new high.
    5. We first showed a contracting leading diagonal 5:3:5:3:5 wave up.
    6. We showed how such a wave reduced uncertainty there would be a new high.
    7. We showed WHY 1-2-3 is the same as A,B,C until there is an 4 & 5.
    8. We showed an expanding leading diagonal for ((1)) of either iii or 'c', up.
    9. The count worked out perfectly.
    A. We showed how a larger wave down 'turned the degree', an 'X' wave.
    B. We showed how an expanding diagonal downward can just be its triple zz ALT
    C. We showed how to plan for uncertainty by place a stop over the high.
    D. We showed how to have a plan for that, however; as a larger DZZ higher.
    E. We showed how to validate the a-b-c count upward using 'volume'
    F. We showed the new, larger time-frame wave count as w-x-y, for now.
    G. We did all of this in 'real time' using 1-min & 5-min charts.

    It's been a busy day. We hope you have learned from it. We will not do this every day. Will people still complain?

    TJ

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    Replies
    1. Excellent, and much appreciated... thank you.

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    2. I will never ever again give you a hard time.
      It's really good, what you do here.

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    3. Big effort. Appreciated. Thanks ET.

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    4. ET Unbelievable analysis! Thank you!

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    5. ..thx all, for the comments above.

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    6. Thanks Joe, learn something here every week. Incredible!

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    7. @ski .. very glad to hear it.

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    8. Thanks ET, wonderful lessons.

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    9. Thanks for walking us through that Joe!

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  20. One last post for today. Note that because of the 'time' for this sideways wave tonight, then the two "X" waves might be, or 'should be' matched. The up wave is by no means over just yet. Also note that ((y)) is precisely 0.618 x ((w)), and there is no wave sticking outside of the channel like third waves often do. There is also no peak for the third of a third wave on the EWO.

    https://invst.ly/qt7v5

    TJ

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  21. Hi Joe. Thanks a lot for your contributions. Can I please check with you what is the source of your degree violations? In Prechter's EWP book, I haven't seen this point addressed. Would you be able to guide me on where to read up on this?

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    1. Helpful tip, Joe usually will not reply to comments from Unknown.

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  22. Dumb price guy here. Good morning all. Roughly staying above 2800, keeps 3K target in front count. Below the 2800 area, probably going a little below 2700. TGIF 😁

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  23. anyone think Gold finished it's up move this morning? I can't tell what it is but it feels like a B?

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  24. Can a triple ZZ be an "a" or "w" wave?

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  25. Good morning all. Please keep your eyes on this cash channel. It is only a 5-min channel, but it has broken down already.

    https://invst.ly/qtk87

    TJ

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    1. Waves that play around with trend lines can "sometimes" be triangles. The bust 'em, then recover them, then bust 'em. IFF this is a triangle, it would be a way to continue the multiple zigzags upward and waste more 'time' in correction. The current upward correction is quite short in time.

      https://invst.ly/qtktl

      Yesterday I went into a lot of detail. Today, I am not going to babysit this wave. If we go below ((A)), then the top is at ((B)) in a double zigzag, most likely, with a larger 'x' wave to today's low to provide more form and time proportion to the ((W)) wave up.

      TJ

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    2. ..I will say that 'by rule', if a valid ((d)) wave of a triangle 'should be made', then the ((e)) wave 'must' cross back over the w wave to validate the running triangle.

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  27. Wondering if the 4th wave triangle and 5th wave within Minuet (i) were actually part of Minuet (ii). That would give Minuet (ii) more proportion in relation to time and serve as a harbinger of weakness to come.

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  28. Here's an updated chart ..and notation; very hard to decipher waves.

    https://invst.ly/qtmqi

    TJ

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  29. ..can also be seen as 'x' where the ((c)) wave of the triangle is.

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  30. Here's a view of the hourly futures. Where cash has already taken out its high, the futures have not (yet). If there is a triangle here, then it would be confirmed by exceeding the high.

    https://invst.ly/qtng8

    However, the retrace is already > 50%. That, because it is greater than 38%, is sufficient for a 1.618 downward wave - meaning this first wave down should not be an x1.

    TJ

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

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