Thursday, July 23, 2020

Stimulus II

In order to complete today's post, I had to wait overnight to see if the ES futures made a higher high today like cash did. It did. The reason for this was written about before. I had said that a minute wave ((y)) would have to remain 'shorter in time' than the Minor C wave of Intermediate (W), it's larger degree wave in the same direction. Therefore, for this reason, it is necessary to see the Minor B wave as a triple zigzag, now, and it is labeled as such in the chart below.

ES Futures - Daily - Minor B

The Minor C wave of (W) was 16-days, and if the minute ((y)) wave was labeled at last night's peak, it would be 17-days - which is not allowed by the principles of degree labeling. This was also verified on a 4-Hr chart, and it is currently indeed longer. Therefore, I will continue to follow the rules.

This Minor B wave seems to be in keeping with some of these key phrases from The Elliott Wave Principle by Frost & Prechter, "B waves are phonies", "speculator's paradise", "orgies of odd-lotters", and "focus on a narrow list of stocks", "non-confirmation by other averages".  These phrases appear in the section on wave personality.

The Minor B wave is nowhere near a typical B wave maximum of 1.382 x A, but it has exceeded the 105% needed for an expanded flat. The 1.382 x A level would not occur until 3,348.

Last night an agreement in principle was announced on a new round of stimulus, and some of the details have to be worked out yet. So again, while there has been another internal subdivision of the Minor B wave nothing has changed dramatically in the count. Others have been calling for a crash. I have not been. I'm just looking for a regular corrective 'C' wave at this point to see if a better parallel trend channel can be formed. My main concern is that the put-call ratio and it's 10-day moving average remain in speculative territory.

There should be a three-step 'confirmation' process applied to the likelihood of  a downward wave when it is in progress. Step 1 - Overlapping wave minute ((w)), Step 2 - Trading below wave minute ((x)), and Step 3 - Trading below the A wave.

This is still a time to remain patient, calm and flexible. 

Have a good start to your day.
TraderJoe

25 comments:

  1. Here is the intraday wave-counting screen, including daily pivot points (classic calculation) and nearest in fractals.

    https://invst.ly/rjkil

    TJ

    ReplyDelete
  2. I have heard it said that EW will generally give you a good idea of WHERE price is going but not always helpful in telling you when. Prechter gave up on cycle analysis a few years ago as he concluded they were too inconsistent to be relied upon. I was wondering what, if any timing indicators you have found helpful in your own analysis. The last two important tops and bottoms were all within two weeks of major Bradley turn dates. Thanks T.J.

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  3. Here's a brief intraday update. The previous down (red) fractals were hit and price traded down to the daily Pivot Point (PP). The intraday bias is 'currently' down with price below the 18-period SMA. The slow stochastic has gone to over-sold, but not embedded.

    https://invst.ly/rjmu2

    The intraday bias still fights the larger daily time-frame bias.
    TJ

    ReplyDelete
    Replies
    1. ..now the 3,254.50 low is a valid fractal.

      Delete
    2. ES new low-of-day; into the lower intraday band and a divergence with the intraday slow stochastic.

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  4. Possible E-D on the ES 1-min chart; not good below 3,248.50. About the only invalidation I can find. Let it break the upper trend line and back-test it before trusting such a thing.

    https://invst.ly/rjogb

    TJ

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  5. Have you considered that the x emded in katejune and we have been in the Y since then? Indu looks like am inverted h & s and a retest of the breakout soon to sjoot higher.

    ReplyDelete
    Replies
    1. ..yes I have. There are some issues I have with that: 1) that is what the 'crashers', including a large well-known Elliott Wave firm, want when we still have all of this FED stimulus, 2) it does not channel well, 3) the $NYAD - or NY Adv-Dec line made a new all-time high yesterday.

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  6. I do not think y up is nearly over so i do not expect a crash anytime in the next few weeks. The count simply puts us further along then your current count, and explains why the expected c down never seems to materialize, as it already happened and was a relatively minor bump in the road in mid to late june

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  7. ES 30-min price just broke the 13:30 EDT down (red) fractal from yesterday. And it broke the divergence with the intraday slow stochastic.

    https://invst.ly/rjowl

    TJ

    ReplyDelete
    Replies
    1. ..now the 11 AM fractal back from yesterday has broken lower.

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    2. ..now the 3,243.00 down (red) fractal back from 09:00 EDT yesterday has broken low. S1 is below at 3,238.

      https://invst.ly/rjo-9

      TJ

      Delete
  8. (CNBC) $600 in extra unemployment would fall to $200 or $300 a week, under Mnuchin plan

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  9. ES 30-min; now an outside day. Hey, someone tell the market to stop writing candles over my copyright notice (lol) .. seriously ..S2 is at 3,210 and there are three consecutive candle closes below the lower band - just fyi - odds dropping of staying outside of the bands.

    https://invst.ly/rjpdd

    TJ

    ReplyDelete
    Replies
    1. ES 30-min ..now four closes below the lower band; 'rule of thumb' odds drop to 2% of closing below the band.

      Delete
    2. ES 30-min by 1/2 point closed inside of the band, resetting the number of consecutive closes.

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  10. CNBC - States probe Apple for potential consumer protection violation.

    ReplyDelete
  11. There is a new post started for the next day.

    ReplyDelete