On Saturday, June 13th I posted this hypothetical view of the possible path of the ES futures contract. The intent was to show a clear 'five-waves-down' in the Minute ((c)) wave, of the Minor B wave, lower.
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| ES Futures - Daily - From June 11th |
Since that time I have been suggesting flexibility as we gather evidence to see whether this path is viable, or whether the Minor B wave stopped at the June 15th low. Well, on Friday, we may have gotten the evidence we need in the form of degree labeling considerations.
In order to understand this, let's assume the opposite, and see if it creates any degree violations. We'll do this on the next chart. Let's go ahead and place Minor B at the June 15th low.
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| ES Futures - 1 Hr - Degree Violation |
So, if Minor B is at the lower left, then the five waves up to Minute ((i)) can be counted without serious issue. But, note that it is 29 bars long. Now, we could count the next moves as minuet (w), (x) and (y) to a second wave, ((ii)) in the lower right, that might hold the 62% retrace level.
But, you'll see we run into a problem if we do that. Minuet wave (x), which is an upward wave is claimed to be of a smaller degree than minute ((i)), but yet it is longer in time than all of minute ((i)) - the next largest degree wave in the same direction. That would be a degree violation.
So, this suggests that the June 15th low is only minuet (i) and the June 19th high is only minuet wave (ii), as in the charts, below.
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| ES Futures - Daily - Hypothetical in Progress |
This suggests that minute wave (ii), up, was indeed a failure wave, and the hypothetical scenario is playing out. Here is the substructure of the recent up waves again in a two-hour chart - just for clarity.
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| ES Futures - 2 Hr - No Degree Violation |
So, now you can see in this chart that even though wave y is longer in time than wave w, they are now of the same degree, and, thus, there is no degree violation.
This now should mean that a minuet wave (iii) will exceed the low of minuet wave (i) over the course of the next week. Of course, we could not reason such until the waves actually became 'longer in time' on Thursday night and Friday morning.
This is the second post this weekend, and you might like to read the first one if you have not already.
This now should mean that a minuet wave (iii) will exceed the low of minuet wave (i) over the course of the next week. Of course, we could not reason such until the waves actually became 'longer in time' on Thursday night and Friday morning.
This is the second post this weekend, and you might like to read the first one if you have not already.
Have a great rest of the weekend.
TraderJoe
Thanks for your efforts to decipher the price action from 15th on! Your post brings up a couple of things, and Ive tried to pinpoint these on the following comparison:
ReplyDeletehttps://imgur.com/K5K6icN
Thanks!
@GW, your posts still come from the angle of "seeking certainty" rather than assessing probabilities. To directly answer one of your questions, yes, sometimes it is necessary to wait for "post-pattern-behavior" to assess the nature of a prior wave. In the first case, let's take a simple 3-3-3-3-3 diagonal - which is itself it's own internal alternate of w-x-y-x-z. Such as pattern can be leading or ending, correct? Only the 'probabilities' make it more likely ending than leading - not the certainty. So, how can a wave counter or a trader seek 'certainty'. By the very structure of wave theory it simply is not possible.
DeleteNow in the second case, let's take an analyst who counts 'five-waves-up' in the cash session. It is pretty clear that this is what happens. Then, in the overnight, there is a "huge pop up" that fades, and never really shows up in the cash session except perhaps as a 'gap'. So is that the "5" that the analysts counted or the "5-3" with the addition of the overnight session? That's where the probabilities come in to play. It must be probabilities (Fuzzy Logic), and not certainties, or else the market's path would be pre-ordained and everyone would profit. Then, the market would cease to function.
But, all this chatter aside, you are missing something I consider very significant from the daily chart - the third one I posted. I was sure you might find it.
It's OK, no one else has to this point. But I wait .. tap,,tap,,tap.
TJ
This is in reply to GW (hitting reply under his post doesn't work). GW, I, too, struggle with the same issues. My reply is that "its all in the details". I believe that all waves are significant no matter how small they are. The question is when do you stop counting the waves? If you count 2 more, a 3 turns into a 5 or a 5 turns into a 7. If you count 2 less, a 5 turns into a 3 and a 7 turns into a 5. Throw in wave structures that overshoot like expanded flats or running flats/triangles, and it becomes even messier. The time frame that you choose can often hide waves like a lower high or a higher low. So I believe that you have to look at a lower time frame for waves that are significant. I stick with "traditional" EWT. I rarely agree with TJ's methodology because, frankly, it is rarely correct "in real time". But no matter what methodology you use, EW can only provide probabilities, not certainties.
Delete@Bob_J, with regards to being correct in real time, I have posted 5-minute and 1-minute charts on this blog "many" of which - not all of which - have played out in real time. What have you posted in real time?
DeleteMy methodology is different from yours. I simply follow the rules and guidelines of EWT as written. Whatever I would post you would say is invalid based on "your" rules. Therefore, I choose not to post anything. I would love to contribute my ideas as an alternate to yours. Other readers have tried as well and you literally "scream" at them. I had "the top" last week while you were still counting a corrective wave. I REALLY wanted to post my count, but I just don't want to be screamed at ... again.
Delete@Bob_J .. if you had "the top" last week, then you should still have it, and be well satisfied with that. I'm also interested to know if that was in cash or futures because they did different things. As far as screaming I will apologize in advance and extend my apologies if that perception is given. It is my fault. I own it. I will say, that as the writer of an EW blog, it was largely 'degree analysis' that convinced me we would gap down tonight. If people wish to post any EW on Elliott Wave here, then I am more than willing to review it thoroughly, as I do with GW's posts, and BBR's posts, but I have seen so many bad wave counts, including that from the large services that sometimes my patience draws a bit thin. I will try to recognize that as a 'hazard' of the job.
DeleteBut I will say I will give much more credence to that which is supported by sound 'rationale' than simple one's & two's on a chart. In terms of calling tops, remember since when I have been been 'market negative' in my view. And remember the post with the $CPCE of 0.37 as signs that I, too, was looking for what we are now getting.
I only count cash. And I like to show a spreadsheet of numbers rather than a chart because I "see" the waves much better and the measurements clearly show impulses and patterns like nested 1-2's. My count is simply that the first wave down is (1) of [C] of II (for now). (2) is likely now complete. I expect nested 1-2's to develop and then watch out! And yes the degree is correct because I believe the first wave of a larger degree is short in duration. But the degree of the first wave can always change if the wave extends.
Delete..for the sake of discussion, I did spend the first 15 years or so counting cash only. But, over the years, the increasing gaps, and number of points involved in the overnight markets made that increasingly difficult for me. For example, it was hard to ignore a 100+ point swing on the futures on election night. If cash works for you, then it works for you. I now find it harder to count cash than futures also because cash does not give an accurate estimate of the number of trading hours since the last high or low.
DeleteGood evening Trader Joe,
ReplyDeleteI noticed that you included a truncated 5th wave as an alternate to circle wave b on your daily chart.
How can we have a truncated 5th in a wave b? Please explain.
Thanks for all your hard work,
Kevin
..you are getting warmer ..
DeleteNo. That is not a problem and represents working backwards in time. ((a)) of w is just a sub-wave of w.
ReplyDeleteCircle b is a fuzzy 3/5 we don't know which yet
ReplyDeleteThere is a serious clue on the daily chart that such might be the case; can you find it?
Deletethanks. Great post and reasoning. In your first chart above, where you draw a parallelogram to show A=C, is it possible for wave C<A. For example C = 0.618xA or another fib less than 1?
ReplyDelete..possible ..there is a serious clue on the daily chart that such might be the case; can you find it?
DeleteYour daily appears to propose an ending diagonal for ((C)) of B, which would imply a 3-3-3-3-3 structure. The three waves up to begin the W-X-Y would better fit the assumption. That would be my take on the daily.
ReplyDelete..except that S&P 500 cash went to a higher in subsequent waves - at (ii) - which tends to rule that out.
DeleteThe clue is in red: Or Top. Circle a becomes B and Circle b becomes C. Since the trend line has been broken to the down side, the probability has increased that the top is in.
ReplyDeleteActually the clue is 'why' there is the "Or Top". What on the chart required me to do that?
DeleteThe downward wave from the top is now longer in price than the previous downward wave (labeled circle a) so it must be a higher degree wave.
DeleteI will take a try..... as circle a and circle b are both longer in time than any subdivided wave of A. Therefore A, circle a, and circle b on the chart could be all of the same degree possibly being "the top" as an A,B,C correction up.
DeleteOn Fri, Price closed below 3059 Level redline drawn?
Delete..these responses are getting closer. Bob_J @11:27 am is actually correct in one sense. A slightly better answer is "the current down wave is larger than any of the minute waves down ((a)), ((iv)) and most especially ((ii)) and since wave minute ((ii)) is the largest down wave on the chart, then this longer wave down, labeled as (i) would seem to be a degree violation. It should either be of the same degree - minute - or a larger degree down.
Deletesee above@ 3:31 pm.
ReplyDeleteThe ES futures - hourly - have gapped down and traded down to 3,027, so far. This can be viewed as a third wave lower until/unless 3,071 is overlapped upwards.
ReplyDeletehttps://invst.ly/r79r8
TJ
ES has now closed that gap, and I strongly believe the only reason it did so was literally just to close that gap. We are coiled, primed and ready to deploy for a DEEP down move. The train is about to leave the station and take the tracks, sidings and part of the countryside with it.
DeleteHi JG ....never said "has to be", which implies certainty. You know how many posts now I have said 'probabilities', not certainties. A lot of other people will try to force my words into 'has to be'. Not me. So. if we're good with that, I will only say 1) we know that if this is a primary wave up it is already 'longer in time' the prior Intermediate wave. 2) It would 'make sense' from a degree labeling perspective for a primary wave to also be 'longer in price' than the prior Intermediate wave. Also, I am 'looking for ways' to see alternates and will continue to do so. For example, the ending diagonal top I have posted, is a good alternate if this wave falls apart. But, I am not married to that one either at this stage. I am also considering what an [ X ] wave would mean for the larger term count, as an example. I have reached no firm conclusions just yet.
ReplyDeleteJust overlapped.
ReplyDeleteBarrier triangle in gold since 1788.2?
ReplyDeleteThe number of overlapping diagonal structures is getting hard to keep track of. Diagonals are 'supposed to be' relatively rare structures. But, it is hard to count the overlaps differently given where the 'three-wave' structures are located.
ReplyDeletehttps://invst.ly/r7kdf
TJ
@JG ..I simply can not publish the relevant criteria here, it would take a book. But, for starters, you can look to this example.
ReplyDeletehttps://invst.ly/r7kw5
From the left, wave ((2)) is the 'largest retrace wave on the board'. It 'must' be of the same degree as ((1)), down. The preliminary upward waves are all smaller.
Then, on the right, after 'five-waves-up' to ((A)), the ((B)) wave down is longer in price than any internal downward wave in ((A)). It 'must' be of the same degree as ((A)). Notice that the 'time' retracing ((2)), up is more bars than any of the smaller price retraces. This fits. Then notice that ((B)) is longer in bars than any of the smaller downward retraces in ((A)). This fits. But in a zigzag ((B)) does not have to be longer than ((A)) in time.
..and also notice by the time ruler than this upward wave ((A)), ((B)), ((C)) is longer in time than the downward wave. Therefore, it is highly likely that the two waves are of the same degree.
ReplyDeleteThere is a new post started for the next day and to address some more degree labeling issues.
ReplyDelete