In the course of a year, thousands of objective measurements of waves are taken. Is this wave longer in price than that one? Is that wave shorter in time than this one? Etc. Below is just one such objective measurement. At this point, its purpose is to merely inform, not close the door.
Based on the futures movement last night, if measured from wave C, then a downward wave can not overlap and remain shorter than C. It would miss by 10 points. If measured from the A wave low, there is, still barely room for such overlap. There is also room for such overlap in the Dow from its C wave low.
As noted in previous posts, it might be difficult to distinguish a (W)-(X)-(Y)-(X)-(Z) wave in a wedge from an ending diagonal labeled as its triple-zigzag counterpart (1)-(2)-(3)-(4)-(5). The above measurement suggests - but does not yet conclude - that a contracting diagonal is not valid in the ES. And it IS still valid in the Dow (YM) futures.
This is just a measurement for information, and primarily pertains to those looking for a final "five-up" as opposed to a Primary ((B)) wave.
Have a good start to the day,
TraderJoe
Overnight turn from RSI perspective (30min) -
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A couple of points in regards to the difference between counting cash versus futures. There are many reasons why some people only count futures while others only count cash:
ReplyDeleteFirst, Neely's reason to not count futures because of the premium decay, ignores the fact that SPX also has constant dividend decay. As most people here should know, dividends are paid out of the stock price. So if a stock pays a $10 dividend, then the stock price immediately declines by $10, and that decline is reflected in the value of SPX. It's never adjusted back in. However, that's not true of SPY, as many charting services adjust for dividends each quarter when the dividend is paid.
The main reason that most pros don't count the futures is because GLOBEX didn't start until 1992, and until recent years, the overnight volume and liquidity was basically non-existent. EW is a measure of crowd psychology and crowd behavior, and if there is no crowd, then EW becomes useless. At best, it's very distorted. Obviously, the overnight volume has picked up in recent years so more people are giving more credence to the overnight action.
Hrly bonds (ZB) -
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Looks like 5 waves down, ext 3rd (2.618).
DeleteThank you so much, TJ. Do you have any thoughts or gut feelings about the probability of the Intermediates (X) and (Z) of a Primary ((B))???
ReplyDeleteNeed to take one thing at a time, but your question is partially answered in the next post.
DeleteUpdate 4hr - 2 tests -
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SPX 5-min; has a nice 62% retrace, but needs to take out the (B) wave low and show some acceleration for a third wave lower. Right now there is only a 'base channel' which is tentative.
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TJ
SPX 5-min: There's a break of the sub-micro (B) wave low. Acceleration still needed.
Deletehttps://www.tradingview.com/x/bIY8fjZ4/
TJ
..lots of compression at the end of the day; jury is still out, but a gap lower might be expected by the open and such a gap would be clarifying.
DeleteTJ