Thursday, February 25, 2021

Lots of Uncertainty and One Objective Item of Many

Without lower lows and lower highs, or higher highs and higher lows there is lots of uncertainty in the count. That will be addressed in short order from comments earlier today. But here is one objective item (of many you might chose).

NQ Futures - 1 Day - Close Below Band

The NQ futures closed the day below the lower Bollinger Band for the first time since the end of October, 2020! Can they continue lower? They can. One target might be the green 100-day moving average also shown on the chart. Closing below the band 'might' be the first step in a true breakdown lower. Still, a lower local low was not yet made.

Now to address the uncertainty in the ES count, this comment was posted earlier in the day..

"I'm sure you have lots of questions at this point. I do, anyway. That's because an awful lot depends on whether we take out the lows or not. I can currently find several ways to count.

ES Futures - 4 Hr - Possibilities

If we count the triple-zigzag upward yesterday as an expanding diagonal, this 'could be' the deep retrace of the diagonal, only. If we count the triple zigzag as just a triple zigzag it could be (x)? If it can be counted as a-b-c, up, some evidence on the 4-hr chart, then it could be (ii), of a contracting diagonal downward.

One item of interest is the 'speed of the decline'. That wouldn't seem to fit too well yet with a continued expanding diagonal, and might better fit with a contracting one, as an 'a' wave down, if an upward count is disrupted.

Bottom line, highs or lows must be broken to better determine the count. And there is a lot of 'algo risk' between 3,800 and 3,900."

So, the uncertainty remains going into the settlement. But even in this index, the daily bias has temporarily turned lower with a close below the 18-day SMA. And, a lower local low was not made, yet.

Have a good start to the evening.

TraderJoe

44 comments:

  1. Thank you Joe, Keeping everyone abreast in these treacherous and unprecedented times.

    ReplyDelete
  2. Thank you for your analysis TJ. I’ve said many times I like to buy VIX & VXN spikes, we can go higher but I would be looking for a reversal as a buy signal. We are getting positive divergences on many TF’s in Q’s already. The week after option expiration has historically been the worst week of the month. It’s happening again.

    ReplyDelete
    Replies
    1. Spx cash - if it is ABC lower. A = C = 3785.

      Delete
  3. Replies
    1. NQ has confirmed cash (NDX,QQQ) by exceeding 1/31 low.

      Delete
  4. Update on NQ 4hr -

    https://funkyimg.com/i/3b7eC.png

    ReplyDelete
    Replies
    1. I’m expecting bounce tomorrow or early next week.

      Delete
    2. Yep! Lower NQ low for this wave down as well as a new 2021 low. Comment on negation of divergence very interesting. The narrative indeed may have flipped and instead of negation of bearish technicals seen on the way up, we see the exact opposite on the way down. T.J also referenced move below and back within B bands, normally a bullish trigger. Conventional wisdom has it that markets rarely bottom on Fridays. Interesting implications...

      Delete
  5. The little guys. A look at the IWM daily -

    https://funkyimg.com/i/3b7fn.png

    ReplyDelete
  6. Lol! They seem intent on arresting the impulse down, or at the very least intimidating bears into believing they can, but NDX keeps letting the proverbial cat out of the bag. It clearly called "B.S!" on Wednesday's phony rally which I thought exhibited classic "C" wave behavior. Meanwhile, DJIA looks primed to print a weekly gravestone doji. Kinda fitting...!

    ReplyDelete
  7. Dxy is telling me we've just started. Probably a morning rally but I'll hold my shorts. Thanks as always for the good analysis and discussion.

    ReplyDelete
  8. Morning look NQ 4hr (note: 10min delay) -

    https://funkyimg.com/i/3b7XZ.png

    ReplyDelete
    Replies
    1. How probable is it that we just finished expanded flat from 1-26-21 ?

      Delete
  9. A closer look - NQ 30min

    https://funkyimg.com/i/3b83L.png

    ReplyDelete
  10. Good morning all.. cash SPX has the new low too.

    ReplyDelete
  11. ES 4-hr; for the wave iii of a potential diagonal lower, then wave iii should not exceed 3,780 (warning, this chart is not in real time and there has been a substantial upward overlapping bounce already)

    https://www.tradingview.com/x/afTa5Mzu/

    TJ

    ReplyDelete
  12. NQ 30min update -

    https://funkyimg.com/i/3b8f7.png

    ReplyDelete
  13. Remarkably, NDX has yet to notch lower low as NQ has already.

    ReplyDelete
  14. ES 5-min has a nice diagonal to this point. But, upward beyond here would have to be a flat as part of the correction.

    https://invst.ly/tzifc

    TJ

    ReplyDelete
    Replies
    1. ES 5-min: Now at 38.2%, pretty much the minimum retrace.

      https://invst.ly/tzixt

      TJ

      Delete
    2. ES 5-min; reached 50% correction with a better time signature. It is likely a double zigzag in a channel. Can still make a third zigzag if it wants to extend the time. But that is a bit more rare.

      https://invst.ly/tzjl9

      TJ

      Delete
    3. ES 5-min correction at 62%, I can see one way it can go for 78.6%, but if/when over 3,832 then correction is likely completed, and look to break a trend line from the high.

      TJ

      Delete
  15. NQ 30min update (with alligator and AO) -

    https://funkyimg.com/i/3b8so.png

    ReplyDelete
  16. Next Monday is first day of the month. Will may be complete wave iv to the upside direction.

    ReplyDelete
  17. ES 5-min; the level of 3,832 has been exceeded. Now time to watch the trend line from the high. Very possible correction of the diagonal wave is over. And, if we are making a 'c' wave up, it 'should' be an impulse for good alternation.

    https://invst.ly/tzk3n

    TJ

    ReplyDelete
    Replies
    1. ..first pierce of the trend line from the high; good sign. Now, the low of 3,812 should hold for the continued local up count.

      Delete
  18. Could an ending diagonal (contracting) be forming in Dow
    1- at 8.1.21 high
    2-at 31.1.21 low
    3-at 25.2.21 high
    4-now forming low

    ReplyDelete
    Replies
    1. hi Indy .. that's a good try, but I think some things are incorrect; the Dow futures has a higher high on 21.01.21, so you would have to move the 1 to there, because Flat waves are not allowed in diagonals. Second, where are you saying the diagonal 'starts from'? Where is the '0', origin? I see what you are thinking, I'd just like to cross check it.

      Thx, TJ

      Delete
    2. Oct low is 0 ie X on yesterday’s daily chart
      21.1.21 is 1 as you corrected

      Delete
    3. Thanks for the reply. I think in that case that wave 2 is much too small at less than 38%. 'Most' diagonal have waves 2 & 4 retrace between 62-81 percent. The guidelines are in the Elliott Wave Principle. They don't 'always' work, but they usually do.

      Delete
    4. Most grateful...btw been following you daily for a long time ...much respect for an excellent free resource

      Delete
  19. ES 5-min, if wave 'b' is identified properly then wave ((2)) should try to hold that trend line (or stay much higher). It is ok for wave ((2)) to pierce that trend line, but it should close back above it.

    https://invst.ly/tzkek

    TJ

    ReplyDelete
  20. very complex wave, I thought it was a complex 4, with 5 started today. close and futures seems to suggest it. Have a good weekend everyone.

    ReplyDelete
  21. Lol! I does not get any sneakier folk. New low AFTER session close! Yikes! Thanks for the blow by blow T.J and Greywaver. Enjoy your week-end eveyone!

    ReplyDelete
    Replies
    1. ..see below; ES futures did not make a new session low by the settle. Not sure if it will hold or not. Looks like 'everyone left for Friday happy hour!' Me too!

      Delete
  22. ES 5-min; that was the other way to get the 78.6% retrace that I mentioned. The three-zigzags was a leading diagonal. The high was not exceeded, and then a new low below the diagonal. Not sure if it will hold up or not. If not, then we might have (iv) or (x) as a failure at the high.

    TJ

    ReplyDelete
  23. A new post is started for the next day.

    ReplyDelete