Friday, March 5, 2021

Bottom Holds and Whip Around

Today, prices initially moved lower and failed to poke through the bottom again in the ES futures. The NQ futures did make a marginally lower low. So, this seems to indicate either a "b" wave location or an "x" wave location. 

 

With this in mind, while we can't have 100% reliability in the count above, we can say that the waves are counted as they occurred in real time. In fact, we counted today's down wave to ((B)) in real time on a one-minute chart. We counted three-zigzags lower in a contracting pattern. We said it could be a diagonal - leading or ending - or the three zigzags. It was the latter. We showed the numerical levels that such a diagonal shouldn't exceed. It didn't. We showed the back-test of the potential diagonal that would hold if price headed higher. The back-test did hold. Prices headed higher into the Friday close.

So, it 'feels' like a second wave. The upward retrace is more than 38% of the diagonal, and more than 50% of the entire down wave. Is it over? It doesn't have to be. There could be another pop up for the fifth wave of a ((C)) wave. And remember, to lengthen a correction in time there could be another (x) and a (z) wave. There is no certainty that will happen. Thus, we continue to count in real time until there is a wave structure that provokes more clarity.

Have an excellent start to your evening and to your weekend.

TraderJoe

51 comments:

  1. 👍 thanks for your work. VIX & VXN had nice reversals today.

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    1. The "reversals" in volatility instruments appear to me to be a knee-jerk reaction in the form of aggressive shorting of volatility by a lot of folk throwing caution to the wind in the face of what might well be a high degree change of trend. If that is the case we will certainly see the missing VIX gap higher when reality dawns. Friday did not remotely resemble anything like a capitulation spike and the price action has "C Wave" written all over.

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    2. https://schrts.co/uXXZqWND

      I agree. I think we get up to 37-44 before SPX bottoms. Maybe 3676-3500 fib range in cash.

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  2. Really look forward to your writing. Thanks! Good evening to you.

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  3. Daily spot Gold for next week -

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

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  4. Way off on this? SPX mthly -

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

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    1. Several wavers think the megaphone ended at 2214 because of the thrust out of that bottom? Others see that ABC down to 2214 as wave 4 and now we are in wave 5 of larger iii. I can’t keep track of all the counts, lol

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    2. The "he" referred to on the external retrace measure is Neely.

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  5. Why do you ask like I'm in the 3rd person? The problem is this one shown in the chart:

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

    I'm not sure there is 'any' Elliott Wave precedent for how to deal with 'negative prices'. This seemed to be complete mismanagement on the part of the CME when they allowed traders to buy contracts for $1 to $5 thinking they could never go below $0. And, then they forced them to take delivery or pay up. And, it was only for a day or two - when it can take weeks or months for Crude to otherwise make a $40 move.

    Therefore, all I can do is count locally, meaning where prices are now. And my confidence level in any such counts is very low. Sorry, don't blame me. Blame the CME.

    TJ

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  6. Gold/Oil ratio (mthly) for reference -

    https://funkyimg.com/i/3bmT3.png

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  7. On Thursday's thread I showed, using fib relationships, how the recent decline may have ended at ES 3720.5. Specifically, counted as a w-x-y, y can be seen to equal 138.5 times w. Alternatively, counted as an a-b-c, c can be seen to equal 1.239 times a.

    More fib relationships that bolster the argument that new highs will be seen before new lows can be found in tech. At Friday's lows COMPQ/NDX put in their largest point decline since their March 2020 lows. The retracements measured 0.236% and 0.235% respectively. Using NQ as the benchmark for measuring TIME it can be observed that Friday's low occurred during the 41st 8 hr candle. The prior decline of not dissimilar significance occurred during September 2020. On that occasion the low occurred during the 40th 8 hr candle.

    Overall the precision of the noted fib relationships and the largest decline in tech in both time and price are hard to disregard in my humble opinion. Therefore I will be looking to count in an upward direction rather than downward whilst last week's lows continue to hold.

    Looking forward into the new week we can see that the 3 waves off the ES low (3720.50) have a relationship that has so far reached c = a x 1.293. As ES fib relationships have been quite precise of late I will be looking at higher prices early in the new week before expecting a meaningful decline. The specific levels I will be watching are as follows:

    ES 3858.40 where c = a x 1.382
    ES 3869.50 where c = a x 1.500
    ES 3880.60 where c = a x 1.618

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    Replies
    1. The IXIC, NDX have what appear to be measured moves as well.

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  8. TSLA daily (if interested) -

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

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  9. It seems to me that over-arching all the minutiae of time and fib relationships and measured downside targets, is the larger context of decisively broken rising wedges. As was the case with the prior wedge,a spirited upside rally was to be expected. It is certainly true that SPX in particular has the uncanny habit of clambering back inside breached acceleration channels to continue bullish runs. The size of the current pattern I think suggests that this decline is not yet done, not by a long shot...

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    1. And, also to keep in mind that the NQ futures 'do' have downward overlap which is also meaningful in the Elliott Wave world.

      https://www.tradingview.com/x/oOqmNM04/

      Some other futures do not show this overlap.
      TJ

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    2. TJ - since the move down in the NQ is larger than the Sept move down, would this suggest a possible change in degree, or am I thinking incorrectly?
      Thanks

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    3. Great point T.J. With a tech weighting of almost a third, hard to imagine SPX marching to the tune of a different drum than NDX, which, as it has been doing of late, may well be giving traders a rare glimpse into the future...

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    4. Greywaver, Thanks for posting that question, looking forward to ET's response.
      I would think it would at a minimum suggest it is the rare XX in WXYXZZ or start of larger X since March 2020 lows.

      Funny to see these indices have doubled since the March lows but 10s of trillions should buy you something. :)

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    5. @GW .. I might be doing something wrong, but I don't see a longer down wave, yet. Measurement below?

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

      TJ

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    6. Agreed on the measurement TJ. As a proxy for market health, I've cast an eye towards Biotech (XBI) which IMO has implications for NDX and SPX. Biotech led the rally up, and after topping 2/9/21, is also leading on the way down.

      The current corrective wave in XBI is already larger in price, but not yet in time, than any wave since the March 2020 low.

      https://www.tradingview.com/x/KoMg0HNv/

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  10. A closer look at spot Gold (if interested) -

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

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    1. Early Sunday morning studying :) Are you keeping an eye on your faang? I think you had Tesla in there as well. I lost that chart. Kinda thinking pull back is no more than sector rotation also thinking NDX may lag other indices.

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    2. FAANG is working on reg. hidden div. May see a pos. HD set up, but no uptick yet (wkly).

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  11. @JG, again I want to reiterate this is not about a favored count busting. Or an alternate. This is more about a 'market mechanism having broken'. For example, I have no idea why, when Oil approached $5 or $2, the CME didn't 'raise margins' to be almost the same as buying the tanker to prevent CL from going negative. This would have knocked most people out of their positions at the time. The CME doesn't think twice about raising margins on Stock Indexes (around an election, etc.) I don't know why they didn't take similar steps here. When "Cushing went full", they should have said, "Futures Margin = Full Cash". They didn't. So, now, if one can only count (W)-(X)-(Y) down to the -$40 low I have no idea if there will be another (X) & (Z) or not. Or if the (Z) will fail to break below zero or not. From an Elliott Wave perspective there is not even a solid break of the 2-day uptrend line yet from the -$40 low. Maybe more if that happens. Right now, all I can say is CL is peaking above the strict channel shown in the Monthly chart.

    https://www.tradingview.com/x/qbuhf5dp/

    Is it a fake out? I don't know. Is it the start of a SuperCycle? I don't know. Could it be? Yes, it 'could' be, or it 'could be' another (X) wave.

    TJ

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  12. A look at Russell futs - daily -

    https://funkyimg.com/i/3bnY6.png

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  13. Let the games begin! NQ gap higher quickly filled. Will it lead the way...?!

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  14. Update to spot Gold (6:42am post) if interested -

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

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  15. Gap up on overbought daily CL and drawing a shooting star at present - https://www.barchart.com/futures/quotes/CL*0/technical-chart?plot=CANDLE&volume=0&data=DO&density=M&pricesOn=1&asPctChange=0&logscale=0&indicators=SMA(100);SMA(18);BBANDS(18,2);STOSL(14,3);COTLC;SMA(3)&sym=CLJ21&grid=1&height=500&studyheight=150

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  16. DJ future look like completed a zigzag? What do you think about it?
    https://www.tradingview.com/x/Yit7WHaJ/

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  17. We finally have that overnight VIX gap higher as the lemmings indulging their Pavlovian response feel maximum pain. If we in just a correction that gap should remain unfilled for the duration.

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  18. So it was a bull trap after all, figures. Btd starting to be a costly strategy

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  19. Morning update on spot Gold (4hr) -

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

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  20. Good morning all. Here is the ES 30-min intraday wave-counting-screen updated with daily pivot points (classic calculation).

    https://invst.ly/u2nbc

    TJ

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    1. ..price is 'under' the 18-day SMA with a negative bias, and it is 'over' the 18-per intraday with a positive shorter term bias, so the two fight each other in here.

      TJ

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  21. Beyond amusing how the clowns are trying to bamboozle traders who were not watching the futures...LOL!

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  22. ES 30-min; after two consecutive closes outside the band (probability ~3-4%), the outside reversal candle closed inside the band and reset the number of consecutive closes. The intraday slow stochastic is currently still positive on this candle.

    https://invst.ly/u2o6d

    IFF, a higher candle can be made today - because of the consecutive close reset - then it is possible this is a-b-c up in the futures; and would that be (1) of a contracting diagonal until Tuesday (Tuesday turnaround?) would be the next question. A scenario like that could be negated at any time, but the House hasn't voted on the Stimulus yet again, and needs to.

    TJ

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    Replies
    1. ES 30-min now has the higher high ..keep an eye on R1.

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  23. NQ 30-min; some disparities to note. The NQ 30-min futures did not make a higher high after the cash open, and are now back to their daily Pivot Point (PP), and their intraday 18-period SMA.

    ES futures are not as weak as this at this time.

    TJ

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    Replies
    1. Here is NQ by comparison..

      https://invst.ly/u2pq7

      TJ

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  24. Update on NQ 4hr observations -

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

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  25. DJIA all time high with massive daily bear div. Rotation play looks like another bulltrap.

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  26. DJI daily -

    https://funkyimg.com/i/3bpr4.png

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  27. ES 30-min, fractal break and back to the 18-per SMA. Couldn't quite reach R1 .. and 'might' be a sign of weakness. Intraday slow stochastic has now lost it's embedded status. Would be interesting to see some consistent trading below the 18-per SMA, intraday, and below the 18-day SMA, which price is currently below.

    https://invst.ly/u2rdp

    TJ

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  28. Equal weighted FAANG index currently down about 2 1/2%.

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  29. NDX (cash) - observations

    https://funkyimg.com/i/3bpv3.png

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  30. Replies
    1. so that would mean we start the melt down this week? Yeah noone is expecting that.

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  31. ES 30-min; first bar close below 18-per intraday SMA, and first bar close below trend line from the 10 AM Fri low.

    TJ

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    Replies
    1. ES 30-min; one candle failure of back-test of intraday trend line (shown) with a lower low. Other candles 'might' try to back-test again.

      https://invst.ly/u2sg8

      TJ

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  32. Good morning all. Here is the ES 30-min intraday wave-counting-screen with updated daily Pivot Points (classic calculation). Keep in mind the 18-day SMA is just below the R1 level.

    https://invst.ly/u32qz

    TJ

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