Thursday, May 7, 2020

Three Waves in Two Directions

From the ES hourly chart below, so far we have only three waves in the down direction and three waves in the up direction. These are completely compatible with either the triangle count or the diagonal count.

ES Futures - Hourly - Three Wave Patterns


Today's up wave made a slightly better attack on the 62% retracement level, and it is taking longer in time than the downward wave. The marginally higher high seems to be on a likely divergence with the hourly MACD, as well. The up trend was stopped (at least temporarily) by an up trend line from the origin of the a wave up through the trough of the first three waves down of the b wave.

So, the game tonight and tomorrow into the payroll employment report is to monitor the high and see if it is exceeded (i.e. IFF today was just the first wave of the c wave). And, if not, a better confirmation of a trend lower might come by drawing a line from the start of the a wave through the bottom of the b wave, and seeing if that line breaks substantially and survives a retest.

IFF today's high is not exceeded tomorrow, the b wave 'should be' exceeded lower. At the end of the day, we could count five-waves off the top, including a 1.618 third wave.

Have a good start to your evening.
TraderJoe

50 comments:

  1. I was thinking the 5 waves down today might be c of flat 4 of the c wave up posted on the chart. We'll see in the morning.

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  2. The e wave of the triangle could have ended at 2825ish on ES as well.

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  3. S and p just hit 2910 2918 is complete retrace of wave 2 going down

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  4. Turned at .786 in the overnight. Would make a nice spot for the d. Gonna let the dust settle after unemployment report.

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    Replies
    1. Or could be that "c" is extended 1st wave?

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  5. Could be wrong, but seems like ((d)) is long in the tooth vs ((c)) (currently 2 and a half times longer in time). Is this an issue?

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  6. Good morning. Here's an ES 15-min chart after the jobs report.

    https://invst.ly/qqbuf

    TJ

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    1. ES futures got within one point of overlap, but survived, so far. 'Could' still be a wave four at the low.

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    2. Russell futures now over the high.

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    3. I have RUT 2 as in wave iii of C (wave i yesterday rally, ii yesterday pullback into close.)

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  7. QQQ at a major gap, if we enter it convincingly, the next gap target is about 229. Apple would fill it's gap at 310ish. Little doubt we get there at this point.

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  8. Bonds are in a volatility squeeze with almost no reaction to today's report

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  9. When counting from today's cash low (but counting in the futures), remember, the second wave must also 'stick the landing' for a third wave upward to begin. The second wave of a third wave should be 'above' the line from 0 - 2.

    Most markets can be counted as a first 'five-waves-up', followed by a 62% retrace, followed by a higher high shorter than the first wave up.

    https://invst.ly/qqeb-

    However, note too, that c = a, even for a diagonal does not get one over the prior top. At least c = 1.27 x a or iii = 1.27 x i is needed.

    TJ

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    1. There is now downward overlap on the smaller wave blue .i

      https://invst.ly/qqf4j

      The alternate is, of course, a-b from the low for a diagonal, but not enough evidence of that, yet.

      TJ

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    2. Now, based on degree labeling, because of the timing and depth of the waves, this one movement can only be seen as a diagonal.

      https://invst.ly/qqfqv

      TJ

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  10. ES looks destined to target the 78.6% retrace on ET's top chart. Everything appears in order. 3 down from 2965 and now 3 up to the 78.6%. The up wave, assuming it finishes today, measures approx. 2.618 times the time it took the down wave to complete. Maximum travel is ES 2951. Having some potential overlap now (4 over 1) in v of c of ii. Hard to tell if 3 of v of c of ii is done. So possibly the violation is only 4 of 3 and thus meaningless. On the other hand if 4 of v is in play a likely resolution would be a triangle. That would burn off more of the afternoon and keep the bears suffering a bit longer. Speaking of bears, the are too many for obvious reasons and this is helping to float the market. AA 11 Sentiment Survey I believe had bears per cent at YTD highs this week. Assuming a slightly higher high in futures at the 78.6% target then what? Diagonal wave iii down is certainly a possibility. However don't go putting all your eggs in the same omelette. Certainly a directional change downwards is nearly upon us. How severe is yet to be fully determined. Cycle wise I'm not expecting larger daily moves until the week after next. Maybe next week can provide us with "just" 1 & 2 of a of iii of C down leaving a "3 of iii" event for the following week. There is a degree of speculation here on my behalf but something to be aware of nonetheless. Thanks ET and good luck to all.

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  11. I think we aren in fifth of fifth of this move. Just need one more high unless truncation

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  12. ..downward overlap on first .a up; market is not currently impulsing.

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    1. ..now a near 62% retrace on the upward diagonal at 2,905.

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  13. Its just a guess index has made a clean 5 up and down move for index may have futures could be in triangle of 4th for a gap up sunday evening or truncation on futures if this afteenoon starts a big move down

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  14. So, are you seeing us in 4th of "c"? (up from low on 6th)
    Thanks

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    1. ..see my comment @09:50 am, above. The fourth wave probably ended at this morning's low. Diagonal up is either a truncation 5th, the first wave of five, or 'a' wave of a diagonal five to take us over the weekend. Not below the low of this morning, however.

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  15. JT Can it be a double zigzag in the making ??

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    1. can what? since when? pls do not assume I can read your mind. If you mean the (d) wave of a potential triangle, then possibly. If it's a larger downward diagonal, then it will be only the single zz.

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  16. E T could you show a daily chart when you are working this weekend for us... I m sure you have but this wave 2 seems to be getting to long...thanks in advance

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    1. wave 2 of what seems to be getting too long, pru? Again, please don't assume I can read your mind. Do you mean, 'considering all the waves from March 23 as wave Intermediate (2)?' Or some other wave two of the diagonal or what?

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  17. Here is a new parallel, and by the principles of degree labeling, IFF there is a rally into the Friday close, and it goes over 2,727, then such a wave would be 'longer' than the diagonal upward, and would then be forced to be a 'c' wave or a 'iii' wave.

    https://invst.ly/qqgt0

    TJ

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    1. Now over the 2,918 high of the diagonal. The diagonal is 'leading'.

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  18. Sorry I wasn t being clear...yes from March 23...that could have been 1 or A and now the retrace for 2 or B just would like to see your thoughts on it...to see if I m following along correctly...thanks pru

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    1. Please use the 'reply' link when responding to an item so the threads stay together. Thanks in advance.

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  19. Now ES 5-min can be viewed as five more overlapping waves up in an expanding diagonal, OR a 'b' wave as a flat if the correction of the diagonal hasn't taken enough time.

    https://invst.ly/qqh1j

    TJ

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    1. ..now up over the prior high at (5).

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    2. ..now up and over the ES 2,922.50 overnight high. This upward wave, since the 9:30 am low, now being over the prior high qualified for part of the fifth wave as an impulse, or the three waves up of the beginning of a diagonal fifth wave.

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  20. Martin Armstrong just posted the following. (Note: He does not count waves.) "We still see the market is treading water. We may yet see a little bounce into next week, but the following week is where there will be a risk that we will see a retest of support [i.e. March lows]. The polls will be skewed now to try and blame Trump for everything. We do not really worry about the polls, nothing seems to have changed but we will be running our models on the elections coming up in more detail. The storm is gathering in a desparate attempt to overthrow Trump and this has been an intentional direct attempt to undermine the economy. That was the last shot they had to overthrow Trump and then indeed create a New Green World Order.

    As we head into the months ahead, we will see the devastation inflicted upon the budgets of state and local governments. They will be raising taxes generally 20%-40% to raise revenue. This will only suppress property values and make it much more difficult for an economic boom.

    Therefore the Sling-Shot remains in full play [i.e. new lows followed by new highs]. The issue will NOT be profits and visions of grandeur, but of panic in capital fleeing from total government mismanagement [i.e. out of government bonds into equities].

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    1. Really you follow that guy? ..
      Martin Arthur Armstrong is an American self-taught economic forecaster who uses his own computer model based on pi. He spent 11 years in jail for cheating investors out of $700 million and hiding $15 million in assets from regulators

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    2. @Billy. It is not appropriate to share Armstrong's private blog postings.
      @jay. This is not the place to critique Armstrong.
      Please stick to wave counting or related technicals.

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    3. Probably best to research a bit deeper than the first thing that comes up on Google. Against the government controlled New York courts and press Armstrong was up against. Personally I like the story whereby he proved the existence of the business cycle which had the envy of the government who were at pains to smooth out economic volatility. Envious and impressed by his work they requested, via the FBI, the workings of his computer lock, stock and barrell without Mr Armstrong to go with it. This he refused. Thereafter his troubles began. He spent 7 yrs in jail for contempt of court, a record. The government denied him essential rights all the while. The lost money, he claims and believes he has proven, was the fault of a Japanese institution. To finally get out of jail he was coerced to admit fraud. Doesn't this story sound more interesting? Otherwise we are left to believe the government.

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    4. Tom mind your own business. its not a criticism if its a stated fact and he is in fact an embezzler.

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    5. Billy, if someone is going to post off topic on a public blog I can reply with an off topic comment.. good day, freedom of speech and all that

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  21. ..now up and over the ES 2,922.50 overnight high. This upward wave, since the 9:30 am low, now being over the prior high qualified for part of the fifth wave as an impulse, or the three waves up of the beginning of a diagonal fifth wave. Chart update, below.

    https://invst.ly/qqhb7

    TJ

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  22. Reminder in about 2 min of the Interactive Broker's client full margin requirement @ 15:50 ET. We have seen swings of 10 - 30 points in that one minute. Sometimes up, sometimes down. Sometimes up & down.

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    1. ..there it is; Es 20 - 29 and back to 20, or 18 points up & down in about than two minutes.

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  23. ES 5-min .. now up and over 2,927. Up wave after the diagonal from this morning's low 'must' be seen as a third wave or a 'c' wave following the leading diagonal.

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  24. 3:50 - 3:51 pm the only way shorts making a living these days :)

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  25. The price move in the ES 5-min is so fast that Investing.com can't keep up with it. I had to draw it in with an arrow. Lol.

    https://invst.ly/qqhfn

    TJ

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  26. A new post is started for the weekend.

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