The ES daily chart lost the embedded status for the daily slow stochastic by closing under the 80 level today. Futures actually settled about 3 points lower than this, but the value is 79 even at this level.
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| ES Futures - 1 Day - Tag of 18-day |
In doing so, prices reached down into the "line in the sand", the 18-day SMA. Then, the futures bounces off that level. In the futures, see chart below, we counted five-waves-down using The Eight Fold Path Method for Counting an Impulse (see the featured post in this blog in the upper right-hand corner of the main page.)
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Note that wave iii is the steepest wave of the group, and wave iv alternates with wave ii. Further, wave iv is longer in time than wave ii. There is a new lower low on a bar chart at v. It is not a truncation. We indicated that the fifth wave down should end on a divergence with the Elliott Wave Oscillator. It did, and the up trend began. So far, it looks like we have five waves up to a micro-A wave, ((A)), and all or some of the micro-B wave down, ((B)). Because of the timing involved, we have sketched out a couple of paths for the correction. The circled letters show a simple zigzag. That is possible, but seems short in time. A double-zigzag (not shown) certainly can occur also.
But, in red is shown a third possibility, and this would be a more insidious flat wave: a down wave that again bangs into the 18-day SMA, after another marginal higher high, maybe even drops below the low of wave v, and then heads up in its micro-C wave. Such a wave - if it plays out that way - might give the S&P500 cash chart the appearance of having made five waves down. Corrections are messy. Welcome to the mess!
If at some point price begins making daily closes below the 18-day SMA, then a downward trend might be seen to result.
Have a good start to the evening and to your weekend.
TraderJoe
TJ - correct me if I’m wrong, but I was told A waves can be 3 or 5 waves so we could have finished A/1. Thanks
ReplyDeleteNo Tim. In an impulse or diagonal, A can only be in five waves, not three. I feel you do not understand this concept properly, so you should read the rules for forming impulses, diagonals, and flat in the Elliott Wave Principle by Frost and Prechter. When A is in 3 waves, it can only be in a flat, and must be proven with a B wave that is >90%. I showed an example of this in March 17th post. The B wave is > 90% of A.
DeleteTJ
Thank you for the clarification.
DeleteSPX cash (15min) [some observations on RSI/Sto perspectives] -
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This was my take on the up wave today. There was never any overlap to preclude counting an impulse up. And the EWO signature looked pretty good with the wave four coming back below the line.
Deletehttps://www.tradingview.com/x/UMVAaXrY/
The ((B)) wave up seemed the most obvious in three clear waves.
TJ
Thks! That lower TF probably helped to clarify. On my RSI (15min), the early TL break is one thing that suggests (to me at least) the possibility of going higher, so as to break the upper base channel TL. We'll see next wk. :o)
DeleteThks again.
A look at Crude (dly/wkly) -
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Interesting crude chart. The second candle of the evening star pattern, did it actually gap higher? Hard to tell from chart. I happen to be short uso. 😊
DeleteEnd of wk look at TLT -
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DJI (wkly) - observations
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RUT (wkly) - observations
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Stocks above their 50ma (dly), update -
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Gold Spot - a bit of old school - C&H
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Risk off ratio (xlu/vti) update -
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There is a new post started for the next day.
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