On May 28th (in the post at this LINK) my commentary read, "My market outlook is reverting again to 'negative', and, yes, I might be
a few days early. (This is a wave-counting outlook only, and is not to
be taken as trading or investment advice.)". As expected, I was a few days early.
The reason I made the call is that it is possible to do two things at once. It is possible to both hold a negative market outlook, and to continue counting waves to failure. Then, I showed you my intraday screen with "what to do while not counting waves". Intraday today, prices are lower than where I turned negative.
On June 8th, I showed a chart of the lowest put-to-call ratio I had ever seen. Then on June 9th I wrote,
"So, if we are making a fourth wave, prices 'could' go over the top
again. The key is to see whether a channel count is more-or-less
respected for the wave overall, and if the Elliott Wave Oscillator gets
back down near the zero line to be followed by an additional wave
higher.
If the whole thing breaks down, then the odds build of only a three-wave move up."
On the four-hour chart, which you can see in the prior post, today we got the answer of likely only three waves up. The a-b-c count. There is no fifth wave that in any way resembles the length of a first wave or third wave up. In basketball terms, the market's "jump-shot was stuffed." The Elliott Wave Oscillator did show the way lower, but fourth wave boundaries according to The Eight Fold Path Method were not honored: end of discussion.
Many of you wrote in to say that this potential minute ((b)) wave count was preposterous. With the market closing in on the 3,000 level, does it still look so preposterous?
All that is required to occur for a "running B Wave" is for price to
cross back over the Minor A wave - at least in the futures. Price is not
there yet, but the lower daily Bollinger Band and 100-day SMA indicate
that it could get there, and they "might" offer some support to price. Still, nothing in this post is to be interpreted as that downward movement 'has' to stop there. It is a good option, nothing more. Prices certainly could go lower, depending on sentiment.
Readers of this blog are encouraged to plot the Daily Bollinger Bands (18,2) and the 100-day SMA to see where they are located.
Readers of this blog are encouraged to plot the Daily Bollinger Bands (18,2) and the 100-day SMA to see where they are located.
As shown, the alternative to this count is that we have made a durable and lasting top today. That remains to be proven. I just want to emphasize that this post is being made with only part of the day's data. I reserve the right, after looking at subsequent market data to upgrade these labels to Intermediate (A), and Intermediate (B) if a running flat does occur.
Have a very good start to the evening.
TraderJoe
Great call TJ. I'm firmly in the 'or top' camp but your wisdom was very helpful in timing the turn.
ReplyDeletenice thanks
ReplyDeletelets say your running B wave is correct .....
ReplyDeleteto me this implies tremendous power to the upside coming in wave C
since the correction was too weak to decline very much in price
is this a correct assumption ?
I have something like this in mind, and I will include it in tomorrow's post. At this point it is "purely hypothetical". But I noticed that a certain very, very well-known Elliott Wave service did not follow these instructions in their post-today calling for a "crash wave".
Deletehttps://invst.ly/r3phl
See the instructions on the chart. They are included in the very book which is the foundation of their organization/
TJ
it should be easy to see which scenario is going to play out soon
Deleteif a powerful up wave is coming the decline should dissipate soon foreshdowing the coming up power which the b wave going over the top has telegraphed to you
if not the decline should intensify quickly
i am leaning towards up until proven otherwise
am i correct in my assumptions here ?
mischikJune 12, 2020 at 8:33 AM
Deletealso .... the chart you have would give 5 waves down from the high for all to see.... giving Miss Market the perfect fooler to lure in bears before the upside explosion ....... is it TOO perfect ?
that kickoff was bigger than wave one down. I looked at the ES wave structure last night and thought to my self,that's a crash wave. The VIX agrees. TJ this acts like a wave 3. we shall see and by next week all will know for sure.
ReplyDelete..what precisely do you mean by wave 'one'? dates & prices please.
DeleteI am guessing he means the drop from THE top. If so, I would say now is comparable to 3118 then - similar first drop.
DeleteMy count is we are in a supercycle wave C down. We completed 1 down and just topped in wave 2. Looking at this chart I see no other choice. The Banks this time will be nationalized. Thanks TJ
Deletehttps://i.postimg.cc/k5YyNB7F/2020-06-11-1845.png
458african - shouldn't your (B) count as a triangle? It certainly doesn't work as a 5-3-5 ABC but could feasibly work as a 3-3-3-3-3 ABCDE. This is very interesting though - I've not tried to count the JNK ETF before.
DeleteYou are probably right,but the c and e legs were so weak.Of course the thrust down from e was so powerful,because of the weakness. The pattern is 11 years long. A testament to the stupidity and futility of the FED.
Deletehttps://i.postimg.cc/qv99w0y9/2020-06-12-0851.png
Anybody tracking TSLA? I have it in wave 5 from 177 last June, smaller wave 5 from 785 May 27 after a wave 4 triangle. From there, yesterdays high could be a smaller 5 or 3 - EWO would suggest 3. It didn't come down much today - could be corrective, or LD.
ReplyDeleteAnybody have a count, opinion or different take?
Try something like this, given the whippy character of price behavior of late. A lot of people, not me, thought first the moon shot to 1,000 was a "three" and they were going to buy it for new highs. But it came down hard to about 350 bucks, and overlapped key waves.
Deletehttps://www.tradingview.com/x/try3FCgt/
That overlap seems to limit the number of choices, and the percent price oscillator PPO - a very long term MACD - is not currently confirming a third wave higher.
Do Not Use this as Trading or Investment Advice.
TJ
ET - could you comment on DJT and BKX? I ask because these look ready for the big C down and I wonder what would generate another big rip higher in SnP besides surprise events.
ReplyDelete..purely hypothetical at this point - as is the response to mischik, above, but 'perhaps' they will make flat waves after revisiting the bottom?
Deleteyour recent writings on Bollinger Bands & Slow Schoastic have been very helpful.. thanks
ReplyDeletedon't hope .. just count; "wax-on, wax-off" (from Karate Kid)
ReplyDeleteHere a few things I see that may or may not inform the EW count.
ReplyDeleteIsland reversals across several major indices.
Weekly bearish engulfing candlestick.
Absence of capitulation spike in VIX suggesting any pull-back will form bull flag/pennant
Support at roughly 3000 S/R shelf co-incident with 200 day SMA suggesting an impending bounce.
There are a few other things I won't mention that definitely fall into the "scheme" category that I nonetheless find quite probative.
Best of success to all!
Observation -
ReplyDeletehttps://imgur.com/nlhapiH
It largely means that sometimes corrective waves are difficult to count. In other words, what if ((b)) is mis-counted? It is currently seen as a "three-wave sequence", but what if some internal counting error, such as a flat instead of the triangle, can result in a "five-wave sequence". I have used the best model I know of to count the wave, "The Eight Fold Path Method". But I do not claim the model is infallible. And so that's why, "patience, flexibility and calm" are required. Your posts generally tend toward seeking an "error proof" methodology - probably for your trading profits. Instead, think of it more like "fuzzy logic" - which is a real engineering discipline.
DeleteI counted this wave throughout the night. It can be counted as a expanding diagonal or it's exact equivalent counterpart of the expanding triple zigzag.
ReplyDeletehttps://invst.ly/r3-jz
It 'could' have more to go, but all of it's time and price relationships have been satisfied.
TJ
..note: as the expanding diagonal, it would count only as the 3-3-3-3-3 variety.
DeleteSo far, there has been a 'deep retrace'.
ReplyDeletehttps://invst.ly/r40xq
This is now kind of 'no-man's land' until we find out if there is a new high or a new low first. If the new high is first, then maybe a leading diagonal. If not, the w-x-y-x-z.
TJ
it retrace 90%
DeleteES is now down through the 2,985.50 low .. up wave was w-x-y-x-z
DeleteA question on yesterday's NQ mini -
ReplyDeletehttps://imgur.com/wLwY3JK
The only 'legal' way I can see to have three waves up in this index is shown in the link below.
Deletehttps://www.tradingview.com/x/pKRorQIz/
You 'must' include a 'running (b) wave' which just barely overlaps the (a) wave. That keeps the remaining degrees of all the sub-waves of (c) smaller than the (a) wave. But it 'does' work in this index. I tried many other various combinations of diagonals and triangles and can't find anything that would meet the rules.
TJ
There is a new post started for the next day.
ReplyDelete