It is sometimes gratifying when two analysts come up with similar conclusions. The chart below is of the ES 4-hr futures. A frequent reader and poster on this site (Greywaver) posted a version of this chart a few moments ago in the comments for the previous post. I'd like to expand a bit.
On the chart in the lower panel is the Elliott Wave Oscillator (EWO). Divergence with the recent high is shown. Also plotted is volume on the futures contract; notice how low the volume was at the highest high.
Also, on the chart are two red (down) fractals at the 3,880 level, and one green (up) fractal. The significance of these red fractals on the ES 4-hr chart is that if they are exceeded lower, they would be a hit below the third indicator (Bill Williams' Alligator). Based on our count, we 'could' get a smaller second wave up in the futures. If that second wave does not break the green (up) fractal, then it is likely the Alligator is providing the resistance to upward movement.
Regarding the Alligator, notice that is has curled downward, and this is somewhat difficult to do on the 4-hr time frame. Not impossible, just harder to do than, say, on the 30-minute time frame. If the Alligator remains curled over, it will likely provide upside resistance to price movement.
Note that up volume on the last up move to the green fractal was lower, and thus, volume was not confirming the price move.
So, if as indicated, the pattern is a head & shoulders pattern, then the initial measured move target would be down to the 3,800 level. Breaking the green (up) fractal would spell trouble for the pattern.
Here are some additional technical indications. Once again, there is a McClellan Oscillator divergence.
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| NYSE McClellan Oscillator - Daily - Divergence |
And, here is another look at the NYSE cumulative advance/decline line.
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| NYSE Cumulative Advance/Decline - Daily - Lower High |
This indicator has recently back-tested a prior up trend line and has backed away from it a bit. Still this indicator does not yet have a 'lower low' or a more significant divergence with price that would signify a much more significant decline in price.
This is the third post this weekend. If you have not read the other two yet, you may wish to. Have an excellent rest of the weekend.
TraderJoe
When the alligator's mouth is open, all systems go. :o) Thanks.
ReplyDeleteA look at the wkly Silver miners/Gold miners ratio -
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Updating prior posts - Stocks above 50ma (dly)
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H&S has been on other sites for a week or so. They have been the least dependable pattern the last 5 to 7 years.
ReplyDelete..that's why I have resisted noting them, until volume, sentiment, and possibly interest rates are more in a position to warrant them. Even this one 'could' bust, depending on what Chair Powell testifies to in Congress this week.
DeleteTJ
Agreed, I've stopped looking for them. TJ: thanks for the reminder about the NYAD & NYMO
DeleteHere's 3 that worked out last week. Just sayin' :o)
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With a week to go, mthly DJI -
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Thanks for all of your hard work ET and Greywaver
ReplyDeleteGW - did you take Cardwell's course? Just curious
I took his RSI-basic. Then added Hayden and Brown's books.
DeleteEarly look at the hrly -
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👍
DeleteGood morning all. Here is the intraday wave-counting screen with updated daily pivots (classic calculation). The 3880 level has been exceeded lower, and the S2 daily pivot has been touched. The wave counting stop has been lowered to 3,914 for the time being. Above that level would likely require reassessing.
ReplyDeletehttps://invst.ly/tx3sf
TJ
Assuming wave ((4)), move wave counting stop down to 3,898 as overlap would indicate something different is going on.
Deletehttps://invst.ly/tx5ac
TJ
Because of the 50% retrace of wave ((3)), downward overlap, and pattern of likely 'alternation' this suggests moving the wave counting stop down to just above wave ((4)) at 3,890. Also, revise the parallel channel to go from ((2)) and ((4)) with a parallel on ((3)), ignoring for the moment where wave (1) is on the parallel. If there is a wave ((5)), it should be about as long as wave ((1)) in price.
Deletehttps://invst.ly/tx5pn
TJ
Circle 3 only appears to have 3 waves? Could circle 4 still be apart of circle 3?
Delete@Tim; this is how I have counted the third wave; it has an extended fifth wave. as below.
Deletehttps://invst.ly/tx6cw
TJ
Ok, thanks
DeleteUpdate on hrly -
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Bounce in DJIA, which has decisively filled this morning's gap, much stronger than SPX amd NDX. Interesting inter-market divergence and starting to look like different counts...
ReplyDeleteES 15-min; upward wave counting stop was hit, requiring reassessment.
ReplyDeleteSPX 30-min; with upward overlap already, shorter waves, and a divergent EWO (at the low); one possibility is for a contracting diagonal lower.
ReplyDeletehttps://www.tradingview.com/x/c7kA8B7T/
But, again, these patterns are lower probability and must form properly first.
TJ
Posted this over the wkend for discussion. I think you've just addressed it now. Thks.
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I guess we shall soon discover if the 3900 shelf has now become resistance...if so, price should be firmly rejected here I would think....
ReplyDeleteJust an eyelash shy of filling gap.
ReplyDeleteSPX 30-min: here is the wave counting stop for this pattern.
ReplyDeletehttps://www.tradingview.com/x/va9oqrw4/
It's at 78.6%; beyond that and a diagonal loses it "contracting look" and starts to go "too parallel".
TJ
I have an neg. HD target of just above 3864 for reference.
DeleteGap today on NDX "looks like" could be a 3rd of a 3rd?
ReplyDeleteI think we will see an over-throw of possible lower diagonal TL to about 3820...
ReplyDeletehuh? a cash contracting diagonal will invalidate below 3,847 as a fifth wave would be longer than a third wave. Would have to morph into some other structure below 3,847.
DeleteHere is how the day turned out at the cash close.
ReplyDeletehttps://www.tradingview.com/x/DR84rgX7/
TJ
Sharp call on possible daiagonal T.J. Those rogue fouurth waves always throw me for a loop. Ending, or leading?
DeleteThoughts on 15min NDX -
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Tech looks weak with rising rates. Stalking the Q’s though.
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