As many of you longer-term blog readers know, I have been counting this wave up as a double-zigzag at Primary degree, made up of Intermediate (W), (X) and (Y). Further, students of Elliott Wave know that 'often', not always, the relationship between (Y) and (W) is equality: (Y) = (W). It definitely doesn't have to happen that way, but many times it does. With that in mind: here is the ES weekly chart.
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| ES Futures - Weekly - Rebound off 0.618 |
The market put in a significant down wave this week, but also rebounded off the (Y) = 0.618 x (W) Fib relationship shown above. In doing so, it regained the weekly trend line again. I asked readers not to get too excited about an ambiguous down wave in the futures - one that can be counted as a 'three' or a 'five'. There are many, many wave structures that can account for this move. We covered several of them in yesterday's comments. They include a larger fourth wave, and an (X) wave triangle, among others. In the ES, there has been no downward overlap of consequence, and only one significant swing low has been exceeded. So, as I have repeated often, new highs are possible. Let me say that again so that you don't think I am drinking the prune juice: new highs are certainly possible, maybe even more likely. But they are not for sure. With that in mind, it is conceivable that stocks try for that 0.786 Fib shown above. For example, one need only consider this daily chart.
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| ES Futures - 1 D - Longer C Wave? |
It should be clear from a chart like this that higher highs are possible. There are other permutations of this count. For example, Minor A could be located where minute ((b)), up, currently is shown. But, they amount to roughly the same thing at this point. Readers of this blog can and should draw such a chart, and verify that the daily EMA-13 has not even crossed below the EMA-34 at this point. So again, we will be flexible, patient, and calm. And no, I am not drinking the cool-aid. Yes, a truncated fifth wave is possible too.
And while it seems somewhat difficult to have options, one thing has become more clear: it will be hard to start a true down trend without taking out that 4,030 low, marked as wave minute ((iv)), first.
Note: Over the weekend, I received numerous messages from the blog operator (Google) that a number of pages were subject to deletion for malware. Then, a roughly equal number of messages were received stating that the pages were reinstated after review. The situation looks OK at the moment, and this is one of the reasons I do not operate a paid site. The blog owner is responsible for malware protection.
Have a good start to your weekend.
TraderJoe
I still have a 4277 pos. HD target from monthly (cash, prior posts) that is yet untested. Another wave up would likely address it. (fwiw). But, of course, a miss can tell as much (sometimes more) than being reached. :o)
ReplyDeleteAn aside - From the Jan 29 low (B on daily chart above), let's look at one method of applying sector rotation and relative strength [if interested] -
ReplyDeletehttps://funkyimg.com/i/3c441.png
https://funkyimg.com/i/3c442.png
Thanks TJ & GW for your updates. Not sure we are out of the woods yet but I put money to work close to the lows, raising stops just in case.
ReplyDeletewould aligning your upsloping TL at the bottom of the two wicks (march and may) make more sense?
ReplyDeletein fact, aligning the start point of that TL with march 18, treating march 23 as an outlier, provides a TL with more tags. but this is not a TL blog, its elliott.
DeleteYou are free to draw trend lines any way you choose. I chose this trend line to reflect what actually happened: that the original trend line from from 0 -> (X) was regained each time it was breached.
DeleteTJ
one that can be counted as a 'three' or a 'five'
ReplyDeleteSuch a lack of precision---Elliott Guessing
You are welcome to start your own blog with your own 'perfect & unchanging' wave count. Then I can come and criticize it, too.
DeleteHere's the next step (if desired) to drill down further once sector relative strength is determined [if interested] -
ReplyDeletehttps://funkyimg.com/i/3c45J.png
For reference, SPX from 5th day to 64th day gained 8.33% :o)
DeleteTJ- Could this be a possibility? Just keeping an open mind due to all the liquidity that Govt has poured in.
ReplyDeleteAlso my (ew) reasoning would be that minor A took longer time than minor C if we think that Int Y ended at last week's highs.
Your criticism is welcomed-:
https://www.tradingview.com/x/HNazsUG8/
Can verify with TJ, but I dont believe your triangle (d) should close above (b) [unless an expanding triangle].
DeleteSo then why CANT it be a expanding triangle?
DeleteThanks
(e) should be > (c).
DeleteNo disrespect but -Says who? under what rule?
DeleteI've noticed several instances where what looks like a reasonable triangle formation has a very low dip after exiting the trendlines and then a thrust that is longer than what you would measure from the base. Take a look at the dow before the current drop started.
Deletehttps://s3.tradingview.com/snapshots/q/quBiYvfl.png
I've also been seeing very short e waves befor the first thrust out of the triangle like in PLTR.
https://s3.tradingview.com/snapshots/v/vj9djCbL.png
In summary it appears we have a market on steroids to the upside, High targets exceeded and low targets not reached. The Dow especially seems to have further to go up.
no, fibo; your count starts off incorrectly. By 'rule'; you can't have a three-wave A wave, i.e. your (a), (b), (c) to A, without a B wave that makes a 90% retrace. Your B wave retraces much, much less than 90%.
DeleteThat is, in fact, a rule in the Elliott Wave Principle. Otherwise, you can make three-wave A waves out of almost every wave sequence.
TJ
Fibo .. also before responding too much to the other readers, it would help if you read & memorized The Elliott Wave Principle by Frost and Prechter. It is pretty clear from the comments you have made that you may not have committed the basic rules - as outlined in that book - to memory.
DeleteThanks in advance,
TJ
Thanks
DeleteAgreed- I come from Neely's and Tony's school of thought and not Prechter's book.
DeleteThanks Superdave- I agree. Pundits and Guru's say this every week but I will just say it this week that, Next week is very telling. Either we will have a 3rd down or a 3rd up. I am going with the latter for now.
Delete@fibo .. with all due respect. Neely 'never' said what you are saying. He said it is ok to count a-b-c-x-a-b-c, etc. He never said it was ok to count a-b-c as A, then B which is not a flat. I have gone to lengths here to show you 'why' you can not count as you have.
Deletehttps://www.tradingview.com/x/Ek0zRxWd/
In your count - particularly where the B wave does not overlap the first (a) wave, there is no difference between the incorrect count and an impulse. Two different things 'can not' both be the 'same' thing. This was a major bone I had to pick with Mr. Caldaro, as well.
If you do as you are suggesting, you can call literally 'any' wave a series of a-b-c waves. It will always be incorrect in terms of what Elliott suggested (otherwise, why have a five-wave-impulse, at all?), and it will be reflected by invalid predictions in the market.
I call such charts 'cartoons' because they are 'just letters and/or numbers on a piece of paper', and they do not at all reflect even Elliott's original writings.
I hope you will take this note seriously. I have taken the time to give you a considered and accurate response.
TJ
Understood TJ and many Thanks.
DeleteA current look at the DJT and DJI (2hr) -
ReplyDeletehttps://funkyimg.com/i/3c4j5.png
"Joe is pretty much the only EW analyst purist, that consistently follows rules and guidelines, no exceptions, no fudge factor, no major revisions"
ReplyDeleteAgree 10,000%
I could be mistaken, but I think Ira Epstein has an often/not always rule of thumb that when the low of an outside up bar is exceeded within the next bar or two, price tends to go to the nearest moving average. In the case of $SPX weekly, the low of the prior week's outside up bar was exceeded last week. While the slow stoch. is firmly embedded, look for price and the 18 week ma to come together. This appears to be more likely since price has moved a large distance from the 18 week ma.
ReplyDeleteNUSI (wkly,dly) observations [if interested] -
ReplyDeletehttps://funkyimg.com/i/3c4xA.png
I like NUSI for income and have traded it several times recently selling close to 28. I don’t think the fund is handling the options properly though. You can see some articles on SA. I would use BB on your chart as it’s useful for this security. Buying the lower and selling the upper. I thought this would get below 26 but not yet. I have plenty of income plays so mostly trading SSO, QQQ, QLD. ATB.
DeleteSPX (dly), sign of non confirmation (to date) -
ReplyDeletehttps://funkyimg.com/i/3c4xR.png