Yesterday Doji, today Doji. Tomorrow? It's a good question. (No, it's Saturday, lol. Have a day or two off!) Here is the daily chart. Note that the advances and declines were roughly even on the day.
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| ES Futures - Daily - Double Doji |
The narrow trading range is probably appropriate for the summer with little in the way of news regarding the stimulus talks, or solid information on a vaccine.
Today on an intraday basis, we first counted five waves up with alternation and a 1.618 third wave; then three-waves down, then a potential diagonal upward that may have failed. We did this in real time. The 'cleaned-up' version of that chart is below.
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| ES Futures - 5 Min - Break Down from Channel |
If there was actually a diagonal failure, then Monday might see lower lows yet to come. In the mid-afternoon, there were five waves down, starting with a small contracting diagonal. This lower local low meant that the start of the larger upward diagonal (if it really is one) was exceeded lower in less time than the diagonal took to build. We tended to temporarily rule out a (b) wave flat, because the (b) wave sub-wave upward would have taken more time than the entire a wave up, and that would seem like a degree violation.
At the end of the day, price did a perfect back test on the underside of the channel, and then dropped off after the cash market closed.
The extent of the downward movement is not quite significant yet, although the S&P500 cash index made a lower low than t he start of it's wave, today. The futures - as you can see above - did not.
On an ES 2-hr chart (below) you can see prices have again closed below the rising trend line shown.
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| ES Futures - 2 Hr - Break, Back-Test and Close Below Trend Line |
Queue the Rod Serling Twilight Zone music. And have a good start to the weekend.
TraderJoe
Can 123 be abc and done?
ReplyDeleteAnything is 'possible' but the point of wave counting is to do what is most probable. The daily slow stochastic is still embedded, price is over the 18-day SMA, and the advance deline line is at an all time high. Seems unlikely.
DeleteNot a forecast, but the same conditions were present 2/20/20 along with negative divergences on default macd and AO. Daily CPCE is rising.
DeleteHi, ET,
ReplyDeleteThe diagonal above implied an LD. My understanding is that in LD, 1, 3, 5 should subdivide in 5 waves while 2 and 4 in 3s. In the above chart, 1 and 3 are both 3 waves, could that be an ED?
Hi Redcloud. Your understanding is incorrect. Section 2.5 of the current on-line edition of The Elliott Wave Principle by Frost & Prechter states,
Delete"Waves 1, 3 and 5 of a leading diagonal usually subdivide into zigzags but sometimes appear to be impulses."
So, if they are zigzags, they are 3-3-3-3-3; and if they are impulses they are 5-3-5-3-5. They can be either. It's in the book.
Further, ED's occur 'over' the former A, or 3 wave - just like in the five-minute chart above. The first wave of diagonal c is 'over' the prior 'a' wave. LD's occur under or 'mostly under' the former high.
Since all ED's are composed of three zigzags, then if there is an "E-D looking" structure under a former high, and it ends a sequence, then most likely it is just the three zigzags: w-x-y-x-z and not a true E-D.
The whole point of an ending diagonal tracing out 'over' it former 3 or A wave is so that waves (i), (iii) and (v) express their character as 'motive' waves, and not corrective waves. The three zigzags w-x-y-x-z are corrective waves, unless they are in a leading diagonal.
Lastly, the fifth wave of a true Leading Diagonal, must 'never' fail. In a bull market it 'must' make a higher high. In a bear market, it 'must' make a lower low. By contrast, the fifth wave of a true ending diagonal - whether wave five or wave C - is allowed to fail.
TJ
Thanks TJ for the details. Learn something new again from this blog. Have a wonderful Sunday. And everyone please stay safe and stay healthy.
Deletewelcome .. migration..
Deletehi Tim.. what's with the "not so sure"? In other words, you are making a claim, saying "no new high". But the evidence you cite is of a 50% retrace back in 1929 - 30, and it doesn't seem analogous. We are now at 90%+, for some indexes. Keep in mind the S&P500 cash index did not even exist in 1929 - 30, so I'm not sure I should take something like this seriously.
ReplyDeleteFrom Wikipedia, "On March 4, 1957, the index was expanded to its current 500 companies and was renamed the S&P 500 Stock Composite Index."
Please don't tell me about 'back-calculated-indexes'. Too many games can be played with those like not knowing if a company was even in existence at the time.
TJ
I have the max for "4" at around 3135. This assumes "3" is completed.
ReplyDeleteSome observations on the NYSE -
ReplyDeletehttps://imgur.com/ZFDM3iO
$CPCE (put/call) moving avg.
ReplyDeletehttps://imgur.com/zs1rYqO
Closer look related to prior NYSE chart post. Observations
ReplyDeletehttps://imgur.com/xsEzgnA
Thanks
From my perspective, the key takeaway is not the placement of labeling from X/2 on, but rather the suggestion (via the 34ema and channel) of 5 waves to date. As noted, this could have varying implications going forward.
DeleteA new post is started for the next day.
ReplyDelete..we agree on recession/depression.
ReplyDelete