Yesterday, we said there was a possibility of extending the flat wave (shown in the chart below) upward, to extend a correction in price and time. As a triple combination, though, we said the odds were quite low, as this is a fairly rare pattern. The overnight news that the GSA was going to allow the Biden transition to proceed was greeted well by the market, and prices did add another leg higher, but went so far as to invalidate the potential downward diagonal as shown in the ES hourly chart, below.
 |
| ES Futures - 1 Hr - Diagonal Invalidated |
As you can see, prices went marginally over the high, but sufficient to invalidate the downward diagonal. So, the alternate pattern we showed at the time of the diagonal creation (w),(x),(y),(x), and (z) - the expanding triple zigzag - takes over the labels. Why this expanding type pattern has repeated on a number of occasions is interesting. First, triple zigzags are quite rare. Second, when triple zigzags occur they 'often' form in a strict channel. So, for the pattern not to be valid likely means it is part of a larger pattern - most likely a triangle. Right now the market is making patterns whose odds are quite low.
That being the case, then moving to the ES 4-Hr chart, below, suggests a 5-3-5 pattern may be in the making, as below. Yes, as a triangle, in the center of the pattern it's odds were fairly low too. But it is countable.
Such a pattern might be to Intermediate (Y) of the upward diagonal looking pattern or Minor B in the larger (X) wave pattern. Those patterns were posted at this LINK. Please have a look if not familiar.
With the holiday about to begin and typically strong stock market seasonal patterns just before this holiday, new highs are not out of the question.
Have a good start to the evening.
TraderJoe
P.S. After the market closed and the data became available, I added this chart. I have shown it many times in the past.
 |
| CBOE Equity Only Put/Call Ratio - Daily - Pretty Low |
Just 'be aware' of the string of highly speculative readings, and note where the indicator was at the prior market top in February. The 10/50 period moving averages have been lower, but not by much.
Regards,
TJ
I think your ed count makes a lot of sense. C of 3 now on...
ReplyDeleteJust for clarification, when you say possible Int (Y) or B, this minor B you are referring to is implied to be contextually a part of an extended flat as we have talked about previously, is that right? Thanks.
ReplyDeletehttps://www.tradingview.com/x/NxZX0Ti4/
yes; as per the charts at the LINK, in the above post.
DeleteA new chart was added as a "P.S." after the close. TJ.
ReplyDeletePbeck here, thx TJ. ((c)) of the Triangle. I always forget to think about slight truncation. I was trying to identify it but instead tried to find other patterns
ReplyDeleteRight? A truncated zigzag in that mess down there?
ReplyDeleteEither way, I do not get the ending point of the wave right and throws off my count on the next wave
DeleteIf I remember correctly, once you mentioned that this cycle correction is 3-3-5. We have three intermediate waves for Primary ((A)), then three intermediate waves WXY for Primary ((B)). A diagonal WXYXZ is valid?
ReplyDelete..it is valid for the second -3.
DeleteGood morning. Here is the suggested intraday wave-counting screen, including daily pivot points. Note that the low currently tested both the lower Bollinger Band, and daily Pivot Point (PP), classic calculation, and so far has held.
ReplyDeletehttps://invst.ly/syo5h
Also, the low of the day - so far - was on a slow stochastic divergence.
TJ
..the wave structure could be a 'last chance fourth wave' because it is kind of deep; or wave two of a diagonal.
DeleteBigger triangle in play perhaps
ReplyDeleteI just find it interesting both cash and futures came close to their highs on different session but didn't take them out
DeleteES 30-min, now 'fighting a battle' at the intraday 'line in the sand'.
ReplyDeletehttps://invst.ly/syp-8
On a five-minute chart, you might draw a line down across the highs, and look for a break & a back-test to see if it succeeds or not.
TJ
ES 5-min; first breach of upper channel line.
Deletehttps://invst.ly/syq9-
TJ
ES 5-min; initial back-test not holding and downward overlap of 3,624.
DeleteES 5-min; parameter in place for waves ((1)) - ((4)) to make an expanding diagonal off the low. Watch out for invalidation of ((4)), and wave ((5)) 'must' make a new high, and it 'must' be longer in price than wave ((3)) and hopefully longer in time than wave ((3)), too.
Deletehttps://invst.ly/syr9l
TJ
ES 5-min; now beyond wave ((3)). Needs 3,632+ to be longer than ((3)) in price.
Deletehttps://invst.ly/syrtv
TJ
Nice ET !
DeleteThanks 6Q.
DeleteThere is a new post started for the next day.
ReplyDelete