In our previous post, we cautioned that today could be a day of 'window-dressing' with its attendant sloppiness as portfolios are reconfigured the end of the month. As you can see from the intraday chart below, that is what occurred at the beginning of the session.
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| ES Futures - 5 min - Window Dressing Day |
Prices declined - during the cash session - from approximately 3,632 to about 3,592 in the first 90 minutes of the session. After that, there was an attempt to buy-back the highs in a likely front-running of the 'first-of-the-month' money which typically enters the market. As soon as the cash market closed, the buying became more serious and continued into the after-hours, so far.
Over the last couple sessions there was downward overlap, preventing a five-wave impulse out of the triangle, so the larger wave count depends significantly on whether a all-time-high is made or not.
Meanwhile, in terms of another market, according to The Eight Fold Path Methodology, today the US Dollar Index confirmed its fifth Minor wave, down, Minor 5, and needs to begin to be monitored closely for a turn.
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| DX Futures - Daily - Five-Down |
In this count, wave 2 is a (w)-(x)-triangle (y), and wave 4 is a Flat for alternation. Wave 5 may be a diagonal or part of one.
Have a good start to the evening.
TraderJoe
4hr current observations -
ReplyDeletehttps://funkyimg.com/i/3947C.png
Basis this contract, new high made.
DeleteHere is the intraday wave counting screen with updated pivot points (classic calculation).
ReplyDeletehttps://invst.ly/s-xds
TJ
SPX cash, and ES have new daily all-time highs.
DeleteI'm not sure about this, but oddly enough, it works! The overlapping count to the high.
ReplyDeletehttps://invst.ly/s-y2w
On a very short term chart (1 min), there are five waves down from the high. Let's see how much fire-power remains at the end of the day.
TJ
Thank you!
Delete..welcome.
DeleteThe EurUSD is now also cleanly into a fifth wave up, as the dollar is in a fifth wave down, per the chart below.
ReplyDeletehttps://www.tradingview.com/x/VCDl5XnK/
TJ
Apple seems to have broken out of triangle. Tj i think you need to figure out if this size and degree etc really plays important role as i have seen one too many examples where it doesn't matter. Now if Apple drops instead of making a new high then i stand corrected Thanks
ReplyDeletePotemkin world, not village!
ReplyDeleteI think this post is excellent - and possibly superbly timed
ReplyDelete1 - 11 has been replaced with only rule needed.
ReplyDeleteCentral bank balance sheets to sp500.
Yardeni reshearch just put out the monthly report, give it a google.
Thanks for the pointer BBR!
DeleteAre there any pieces on the off-balance sheet shenanigans by the CBs, that are hidden - unlike the Maiden Lane series?
Something creative, like Penny Lane?
DeleteYou are on the right track when you mention the fed but I'm not sure I would call it shenanigans. Regardless of the above mentioned signals, prices are determined by that old concept we learned about in economics class, supply and demand. Those signals were based on a fairly stable demand side of the curve based on a fairly stable money supply. With the Fed flooding the system with money over the last decade and repressing interest rates to the point that there is no income to be made in the fixed income markets the demand for stocks has sky rocketed since there is no other game in town.
ReplyDeleteI can't say I'm being pedantic, but in economics, supply and demand work opposite to financials supply and demand. In economics: more people are buying the product so the price goes down. In financials: more people are buying the stock so the price goes...up! It gets confused much too often.
ReplyDelete@JohnnyG .. bravo! on the post. I would only add, no one has seen a Primary ((B)) wave before. It will be longer and more difficult to count than most imagine. I believe I have the degree correct, and that's why this rally 'seems' so built on nothing. The last upward B wave most can recall is the 2007 wave, but it was only at Intermediate degree. This is at Primary degree - as best I can tell.
ReplyDeleteES 30-minute; marginal higher high and downward overlap - 'suggests' a Flat or a diagonal.
ReplyDeletehttps://invst.ly/t0024
TJ
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ReplyDelete@tradingview alerts: Yeah, you are. "In economics: more people are buying the product so the price goes down." You have it exactly backwards. Increased demand (more people buying) causes prices to rise not fall.
ReplyDelete@JohhnyG .. no issue regarding Central Bank pump. It, too, is at historic level - which is concomitant with the degree of the wave.
ReplyDelete@PT and @tva .. I think it is better said that in the economics of goods and services, higher prices tends to stifle demand, as those who can not afford scarce goods can not enter the market. In financial economics however, higher prices tends to create demand - as, by definition, in order to be in the financial markets, one 'must' have excess capital available. Further, in order to establish a 'trend' in prices that one might want to capitalize on, one 'must' have (either) higher highs (or lower lows). That may mean buying in at higher (lower) prices with one's capital if one thinks the move will continue.
ReplyDeleteTJ
Yes indeed Johnny G. I have an equally long list of what used to be fairly reliable bearish reversal signals that also are no longer reliable. In fact they now seem to imply the exact opposite with regard to market price action. I have mentioned it on a few occasions but until I saw your list I had not heard anyone one voicing the same or similar observations. I think the anomaly is wholly attributable to purposeful CB market liquidity injections at critical market junctures. Most interesting!
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