By forming a longer vth wave than the iiird wave shown in the prior blog post, the market made a qualified diagonal downward. The longer vth wave is shown by the Fibonacci ruler in the ES 4-Hr chart below.
 |
| ES Futures - 4 Hr - Qualified Diagonal |
Price made a new low beneath wave iii, but did not reach the moving average shown (VWAP) as of yet. It did, however, overlap the highest part of the prior ((x)) wave shown.
The reason the diagonal is qualified is that it has met all of the requirements of an expanding diagonal. However, whether such a diagonal is a leading or ending diagonal can only be determined by whether price makes a new lower low before it crosses back over the high of wave Minor B. These are 4-Hr candles, so it could be quite a while before we know for sure.
IF the diagonal is leading, then it counts as minuet (i), or alternatively minuet (a). So, an upward wave, tentatively labeled as minuet ((ii)) could begin at any time. If and when it does, it can back-test the lower channel on the above 4-hr chart for a while. Often - not always - such waves break the upper diagonal trend line and wind up in the territory of the prior wave ii, or wave iv. Remember that Tuesday is often (not always) a turn-around day. So, if Monday was a fair-sized down day, then Tuesday might be expected to be an up day.
As of the close of trading, the daily slow stochastic had lost it's embedded reading as shown in the daily chart, below. The only day it can get it back is tomorrow. Price tried to reach for the 18-day SMA (or line in the sand) but couldn't quite make it today.
From what I have seen and learned so far, there is no 'time limit' on price and the 18-day SMA trying to come together. It could take a couple of days, or it could take less time, but that is the eventual expectation. At the end of the day, the advance-decline ratio was about 1: 2.7 which is only mildly in the impulsive category.
Have a good start to your evening.
TraderJoe
Is it possible we have just just seen waves 1 and 3 of the diagonal
ReplyDeletePossible, but that clearly depends on the retrace level.
DeleteYou mentioned it could be an ending diagonal. Ending of what count?
ReplyDeleteUntil the ((w)) wave at 3,392 is overlapped, then it 'could possibly' still be the fourth wave of an impulse. It would be ((w)) = ((i)),((x)) = ((ii)), ((y)) = ((iii)), this down wave = ((iv)). As such((iv)) would count as it's triple zigzag alternate w-x-y-x-z comprised of the three zigzags that make up it's diagonal.
DeleteThat count appears lower probability because, 1- if it were truly more impulsive wave ((iii)) would have beat the prior high, and, 2- there is already overlap in the pattern with part of the second wave which would be ((ii)). But, interestingly, the pattern 'would' have alternation with wave ((ii)) as a complex Flat, and this wave ((iv)) as a triple zigzag.
Because it is lower probability it is something that has to be ruled out by overlaps, and retrace levels, and whether a new low is made before a new high.
TJ
I see, but in that count, it becomes a w-x-y-x-z, so its not an ending diag. So, in what count could it be an ending diagonal as suggested?
DeleteThank you.
This is how ew works..keeping it options open. Stumilis passes this becomes 4, stumilis fails the move up becomes abc
Delete@Ben, also if the five-waves-down end a Flat as a (c) after the previous wave ((iii)). Keep in mind that such provides no alternation, and good luck finding the starting point of the flat. But what you seriously need to realize is that an expanding w-x-y-x-z and an expanding diagonal are literally, wave-for-wave, the same exact structure.
DeleteTJ
Thanks. I understand that they are essentially equivalent. I was just trying to envision a count where it would be an ending diag. as suggested. I couldnt really come up with one, so I just thought you had one in mind when the suggestion was made.
DeleteThanks again.
ET, is it feasible to have a running correction with this much higher B wave at 3550, so that now we are having ending diagonal Wave C to spike a bit lower than 3420? And then Wave b of B into elections?
ReplyDelete@PMov .. you'd have to draw that one out on a chart and submit it for evaluation so it can be checked for degree violations. Post a link to a chart here from TradingView or Investing.com (free) if you can.
Deletehttps://www.tradingview.com/chart/3JWAQ7yc/
Delete5 waves up so far after bouncing from 18 day sma on NQ 5 mins.
ReplyDeletehttps://imgur.com/HQFauwQ
That wave might be part of 4. wave of 5) as follows. NQ has not made a longer 5. than 3. yet.
Deletehttps://imgur.com/Sk7oM0N.
ES 1-Hr, as expected, the upward wave has retraced more than 38%, and we appear to be in the corrective sequence.
ReplyDeletehttps://invst.ly/sj223
TJ
Three waves up, shown as ((A)), ((B)), ((C)) and downward overlap. Flat and multiple zigzags are good possibilities.
Deletehttps://invst.ly/sj2xw
TJ
5th of diagonal...down
ReplyDeleteES 30-min defeats overnight low of 3,426.75; but not the prior low.
ReplyDeleteA new post is started for the next day.
ReplyDelete