Saturday, January 23, 2021

Final Wedge in the Larger Wedge?

On this chart, which is of the ES futures on the 2-hr time frame, there are about 167 candles, so far. And the pattern is even further wedging in the larger 4-hour wedge as shown by the dotted brown lines.

ES Futures - 2 Hr - A Wedge in a Wedge

More importantly, the Elliott Wave Oscillator is on a divergence from wave iii to wave i. Also, there are both second wave and fourth wave signatures on the EWO - most recently with the fourth wave below the zero line. Wave iii is shorter in price and takes 'less time' than wave i. And wave iv is shorter in price and takes 'less time' than wave ii. And, there is a clear overlap between wave iv and wave i. Wave ii is a 50% retrace. Wave iv would have occurred within a 160 candles guideline.

The pattern of a diagonal would indicate prices 'have come too far, too fast". It may end the Minor B wave, up.

Perhaps the pattern indicates that prices will rally into Mon/Tues with a reversal on 'turn-around' Tuesday. That is a hypothesis to be tested. Again, we are still looking primarily for a correction, as a Minor C wave down to follow.

The technical posture of the market is also of interest at this point in time. First is the put-call ratio.

CBOE Put-Call Ratio & Moving Averages

As the chart shows, both the 10-day and 50-day moving averages are at new lows for several years. They are both deep in the 'Zone of Speculation'. This suggests market risks are more to the down side then they are to the up side.

Next is the NYSE advance-decline line. We know this internal market measure is at a new all-time high recently. This is what suggests that any coming down move is likely a correction only.

 

However, recent moves up in this measure have been very hesitant, and there is some suggestion a recent trend line is breaking. Again, this could indicate a correction is nearing.

Please keep in mind, that while it is perfectly reasonable to expect the potential diagonal, above, to complete properly, it is also possible since the potential diagonal is a possible minuet (c) wave of a minute ((y)) wave of Minor B, that the diagonal fails to complete properly. We have absolutely no evidence of that yet. It is something to be aware of the possibility of.

This chart was added on Sunday, after review of the weekly. The measurement is certainly of interest.

ES Futures  - Weekly - At 1.382

The up move is now a 1.382 external retrace of the down move into March, 2020.

Have an excellent rest of the weekend.

TraderJoe


28 comments:

  1. 👍 I agree. Thank you for your work. Stocks above the 50 dma. Rolling over.

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  2. Yes, thanks TJ! Speaking of the stocks above their 50, some observations on a weekly close only. (hopefully not too busy).

    https://funkyimg.com/i/3agP7.png

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    1. That’s cool GW. Are you able to put SPX price below chart to see price reaction to RD and HD? Thanks

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    2. I can overlay, but scaling makes it hard to see corresponding price moves. Could probably see the crossings better using Stockcharts. Might be worth taking a peek at. :o)

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    3. https://schrts.co/WRsPppqi Different look with candlesticks and RSI 4

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  3. Some observations on the ADL itself (daily) - (if interested)

    https://funkyimg.com/i/3agXD.png

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  4. A potentially important upcoming week for the Dollar (DXY) (daily/monthly) -

    https://funkyimg.com/i/3ahHd.png

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  5. An additional chart was added on Sunday to the post above.
    TJ

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  6. TJ - I'd appreciate your critique and telling me what I'm missing, if time permits.
    Thanks!

    https://funkyimg.com/i/3ai36.png

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    1. I would just add that some are not focusing on the internal time signature on 'the right-hand-side of the chart'.

      https://invst.ly/tkg0u

      No matter what one does, the current up wave is 'shorter-in-time' and shorter in price than the first up wave, shown. That means this can still be an upward corrective wave (i.e. a 'B' wave). It can be 'of one lower degree' than the prior up wave. If the prior up wave is Intermediate (W), this can be a lower degree Minor B.

      TJ

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  7. We may be seeing a larger 5,3,5 zig zag to complete a fourth wave. If correct we should bottom this morning with 3800 holding, and get our final 5th up this week.

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  8. Good morning all. Just fyi - the Dow futures (YM) are back to the 18-day SMA, "the line in the sand".

    https://www.tradingview.com/x/wllRLfXG/

    TJ

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  9. $NDX may be showing a classic 5th wave thrust out of a small triangle now.

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  10. Morning look (hrly) -

    https://funkyimg.com/i/3aj79.png

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    Replies
    1. Did you open the trap door. News?

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    2. Didnt take long to make up its mind, lol.

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    3. Saw another pullback into mov avg cross with downtick.

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  11. All .. please note the up wave is greater than 78.6%; this is a place where a failure is 'possible' (not proven). Or the diagonal is making a larger wave iv of (c) of ((y)).

    https://invst.ly/tktkp

    Remember, in a Minor B wave, a failure 'certainly' is possible. But one must remain patient, calm and flexible.

    TJ

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    1. ..measurements show that below 3,776.50, the ivth wave of a contracting diagonal is no longer possible.

      https://www.tradingview.com/x/aaPJNkO0/

      TJ

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  12. Update of 30min cash -

    https://funkyimg.com/i/3ajh7.png

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  13. ES 5-min (shorter term), likely five overlapping waves up to an 'a' wave; the 62% retrace has broken upwards.

    https://invst.ly/tkvh6

    TJ

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    1. ES 5-min; so far, only a 23.6% retrace. Watch for prices to go over the local high or under the local low.

      https://invst.ly/tkwlk

      TJ

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    2. ES 5-min; price has tagged the prior 13:30 high. Look for a flat or an expanded flat for a 'b' wave down; possibly even a running triangle.

      TJ

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  14. A new post is started for the next day.

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