We showed the possible reversal from "three-waves-up" on the weekend diagram of "Waves you can not see yet." Futures gapped down Sunday night and kept on going for much of the day. They turned up slightly in the afternoon. At the end of the day, a preliminary advance-to-decline ratio was about 1-to-6.9, which is starting to get into the more impulsive region.
As a result, it is possible there is a good set-up for a i, ii, ((1)), ((2)) wave downward. See the ES 4-Hr chart below.
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| ES Futures - 4 Hr - Channel |
Prices this morning stabbed through the lower channel boundary that you see - which is also a very similar location to the up trend line from the 23 March lows. Then, they rebounded a bit. With the lower daily lows, today did confirm that the expanding diagonal in futures that we
labeled in near-real-time, wave-for-wave, was in fact a Leading
Diagonal. It is followed by a Flat wave (with an internal lower low) in the futures. The cash market counts a little differently with the contracting diagonal, down, followed by three-waves-up.
Today, in the cash market we counted five-waves-down and posted the same when we had done so.
By the principles of degree labeling, if the market is to make a valid i, ii, ((1)), ((2)) sequence lower, then wave ((2)) should not cross the 3,416 level in the futures, as shown by the Fibonacci ruler above. Otherwise, there is something else going on. In other words, smaller degree wave ((2)) - micro degree - should not become longer in price or time than sub-minuette degree wave ii.
P.S. With five-waves down today, following the diagonal and flat retrace wave, the alternate for this count has to be a-b-c, down.
Let's see how it goes.
Have a good start to your evening.
TraderJoe
If interested, a few supportive observations on cash.
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SPY Fibonacci Pairs:
ReplyDeleteA. From the 2/19 High (339.08) to 3/23 Low (218.26), gives a 120.82 point trading range
B. From the 9/2 High (358.75) to 9/24 Low (319.8), gives a 38.95 point range, down from the 10/12 (354.02 Retracement High):
times .382 = 339.14 which pairs with the 339.08 [High on 2/19 from A].
times .786 = 323.41 (the High on 6/8) which pairs with 321.44 [.146 of the range in A]
times 1.618 = 291 which pairs with 292.93 [.382 of the range in A].
times 2.0 = 276.12 which pairs with 278.67 [.50 of the range in A].
times 4.23 = 189.26 which pairs with 189.75 (.236 extension below the range in A]
Since the 9/2 High of 358.75 pushed just higher than .146 above the range in A, I would not be surprised to see it push just lower than .146 below the range in A - but the 189.26 to 189.75 pair should be remembered.
Objectively, futures trading just under the daily line up from 23 Mar.
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Cash...too.
https://www.tradingview.com/x/ny4jOomy/
TJ
Intraday, the ES 5-min has been rejected against the 3,400 round number seven times, and might go for eight. Still, there are a couple of ways to count, either as a double combination or as an ending diagonal. An ending diagonal would invalidate with new lower lows before a 78.6% retrace of the highs.
ReplyDeletehttps://invst.ly/slyd-
TJ
ES 5-min, the low has been exceeded lower, ruling out the ending diagonal, but making the double-combo very likely.
DeleteTJ
There is a new post started for the next day.
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