Today, with a slightly lower low we began counting the possibility of a contracting diagonal lower in the ES futures. Although the ES has not formally invalidated the fourth wave possibility, the NADASQ 100 (NQ) futures likely have.
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| NQ Futures - Daily - Zigzag |
The NQ's downward wave is the longest on the board since the 23 March up trend began. The NQ futures have the cleanest count - which we have detailed before. Tonight, in the after-hours the NQ futures are down even more.
Given the above count, this following count on the ES futures (not entirely my initial count) seems the best with C = 0.618 x A as the Fibonacci ratio. Rest-assured a zigzag was the only count contemplated, given the wave structure, it was just a question of how it completed.
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| ES Futures - Daily - Zigzag |
This being the case, a tentative channel is drawn around the relevant waves. An Intermediate (X) wave might be expected to hit the lower channel and bounce off. However, as we have written about previously, since many many market indexes are past the 90% level for a flat-type wave, it is possible the (X) wave goes all the way back down to the low. We'll take it a step at a time.
Have a good start to the evening.
TraderJoe
It is one of five reasons: 1) we've had a 90% wave up; those are often (not always) parts of flat waves which means the high can be exceeded again. Remember, I said this high could be exceeded. I was correct in several indexes. 2) time - the factor you cite, so that Primary ((B)) can be longer in time than Intermediate (B) of Primary ((A)). 3) Corrective waves 'often' (not always) travel in a channel. There is no good channel evident in the above waves. 4) Price is still well above key moving averages like the 200-day. 5) The FED is still very, very active.
ReplyDeleteCall that all 'nonsense' if you like. I did not call for a 'crash' like Prechter and numerous on-line web-sites and YouTube videos. The most I was looking for at the time was a further C wave down which was tough to tell if it ended at the beginning of June or the end of June. Their crash calls (so early) were the 'nonsense' to me.
TJ
Notice how precisely wave iii = 0.618 x wave i. Notice the divergence at the low on the hourly RSI. Notice how the EMA-34 weaves through every important numbered wave. Notice how whippy & halting the downward action is. Notice the quick overlap with wave i. Notice the lack of a 1.618 downward follow-through wave (as of this time).
ReplyDeletehttps://invst.ly/s2lxc
This is the simple essence of an Elliott Wave count.
TJ
..the reason wave iv has a "?" mark on it, is that diagonals are waves that 'must' prove themselves. Like a triangle that can not be 'called' until all five legs of the triangle are in place, a diagonal - being a cousin pattern - can also not be called until all five waves are in place. Right now - in the purest sense of the word - there are only two zigzags lower. That's it until a third zigzag should form lower.
DeleteBut, all the people who were 'certain' the overnight gap lower was the end of the stock market as we know it are now shown to be incorrect.
That is why I take a flexible, calm and patient approach to Elliott Wave and base most of the conclusions on simple 'measurements'. They do not always make correct predictions, but they are factual.
TJ
..the risk in this 'potential' diagonal is that it not exceed 3,401 or else it will become longer than the longest part of wave ii, invalidating a contracting diagonal, and leaving just two zigzags downward. Few other methods of analysis provide such exactingly clear invalidation points.
DeleteTJ
The four-hour potential triangle in GOLD may be extending in time.
ReplyDeletehttps://www.tradingview.com/x/vmBGZ8cf/
TJ
So this would be triangle four of five of C of (B)? or a triangle of some sort of down count?
Deletehi Steven M .. I posted my longer term GOLD count here on 16 Aug.
DeleteGOLD REPORT
As far as I can tell, the triangle points to waves downward, likely in an (X) wave, lower. See the report.
TJ
Yes, I loved that report. Thanks! That is what I was basing my question on actually. So what you are saying is that you think the triangle points to downward waves which would mean that we are in the (C) wave of X right? Wouldn't we expect the (C) wave of X to be a diagonal or impulse, in which case a triangle can't be the second wave downward? Thanks for clearing this up for me!
DeleteYes. Triangle shouldn't be a second wave if it develops fully as a triangle.
DeleteStill in 3rd of larger diagonal?
ReplyDeleteCurrent rally busted the smaller one I believe.
Thanks
Given the slight upward invalidation of the larger potential diagonal, this smaller one works in both cash and futures; and it does not break any rules for diagonals. Note, we are making this flexible change within 10 points of invalidation.
ReplyDeletehttps://invst.ly/s2n7q
Also note, that by invalidating the larger diagonal, this upward wave also invalidated a 1-2-i-ii count downward because wave ii would now be larger than wave 2, and that is most-likely a degree violation. And, that's why there is a "?" at iv.
TJ
..and this is what cash SPX looks like ..be sure to use broker quotes and the last wave is the lowest.
Deletehttps://www.tradingview.com/x/LWurS2Sj/
TJ
You think the 5th captures abc structure
DeleteThe assumed wave v didnt even reach .236 of iii. Seems a bit of a stretch, but perhaps it was.
DeleteLate last week I noted NQ offerred up an authentic 5 waves down. The initial bounce retraced 45.7%. Then NQ went to a new low, as did ES and YM. The possibility that the 45.7% bounce was only an A wave was enhanced by the new low which measured 1.34 x A. In other words the low for move so far is quite possibly, if not probably, an expanded B wave as part of flat leaving NQ currently in Wave C of the flat. The flat itself being the upward correction of the initial leg down.
ReplyDeleteAlthough ES and YM did not start with 5 waves down, they too have the same potential structure regarding an expanded B wave at their lows. For ES Wave B = Wave A x 1.50. For YM Wave B = Wave x 1.60.
Therefore all 3 major indices have the same potential unified appearance of being in Wave C up as part of an expanded flat. This Wave C would be "C of B" assuming this correction will be an a-b-c correction.
Yes, in the NQ from what I can see this is a legal count as far as degree labeling goes. Why? Because the first move off the high is long enough so that sub-waves of three are shorter. And, the 'b' wave - which is a down wave - is shorter in price and time than all of wave (i) down.
Deletehttps://www.tradingview.com/x/1rkAacg0/
TJ
I made that same exact call yesterday with a chart. Which obviously got brushed off like many other calls from participants of this blog.
ReplyDelete..pardon me if I got something wrong; there are a lot of people to respond to. You are 1 person. But, in the latest down counts I reviewed yesterday, you were counting the SPY, not the NQ. And you were counting a wave 2, not a wave b, to 346.00. Further, your small wave ii has been busted higher. So, I don't know what you mean about brushing you off. It may have been something earlier. And, if so, I apologize.
DeleteNo worries at all- You are still the best I have seen in 22 years trading. Actually I should say the only one.
DeleteFYI. My Nq post and chart didnt make it since i saw my comments not being published.
ALL good though.
Since we have just passed 1.618, we should assume wave ((3)). Notice in this expansion how each of the subwaves of ((3)) is smaller than ((1)). It is not necessary to make this stuff up. It can be demonstrated.
ReplyDeletehttps://invst.ly/s2poq
There are only 80 bars on the 15-min chart, so the peak of the EWO might be off by a tad. No worries. Further notice that, as labeled, wave (2) of ((3)) is about the same length or shorter in time and price than wave ((2)).
Now, since ((2)) is a sharp, then ((4)) could be a flat or triangle for good alternation.
TJ
That is a drawback of the A/O. Its hard to get a "read" from beginning of a move until we're quite a ways into it, and even then its a guess until near completion. We need a "seeing eye" A/O! :o)
DeleteAs of 15:03 EDT, the ES has reached 90% of it's former high, qualifying for a flat wave; there are ways it can go higher if it wants (as in an expanded flat wave).
Delete..now over the high, and by enough to make an expanded flat possible.
Delete..here's a chart update ..
Deletehttps://invst.ly/s2qrv
TJ
..now back down to 3,406 the start of the flat; 'minimum' objective for flat obtained; can go lower if it wants.
DeleteAll, please notice (so far it's holding). THIS is the classic case of the extended third wave x3. Notice at the bottom it is the >50% retracement that 'allows' the third wave to extend to 1.618. Next, notice the retrace from the high. So far, it is less than 38% of wave ((3)). But it is back in the area of the prior fourth wave of one lower degree (4).
ReplyDeletehttps://invst.ly/s2r1z
This is 'typically' the way the extended third wave impulse forms. The EWO is back to 1 on the 10-minute chart (for 130 candles), but I can't show that on this chart vendor), so it is within the recommended +10% to -40% of peak.
Readers of this blog should try to commit this style of impulse to memory. The variations are when the first wave is the extended wave, and when the fifth wave is the extended wave. And, no, it doesn't 'always' work, but very, very often.
TJ
..and most importantly, from a degree standpoint, the smaller degree labels within wave ((3)), are actually smaller in time and price than their larger degree first and second degree waves.
DeleteA new post is started for the next day.
ReplyDelete3300 seems to be the new battleground...
ReplyDeleteJust wondering ...Why are you commenting so far in the past?
Delete