It didn't take too much to figure out what was going on today. Prices - measured by the ES futures - went down to the 18-day SMA, "the line in the sand", and then bounced strongly in what we counted as five-waves-up. The daily chart is below.
As a result a downward local count has become 'strained'. As stated in the comments, whether we go lower or higher first seems to now depend on whether the high or low is exceeded first. There are an unusual number of double-bottoms, and double-tops now in the price structure. Today's double bottom could very well be the bottom of the (b) wave down - except if it is exceeded lower.
And, if the high is exceeded first, it could well be the (c) wave up. As of the close the odds are about 50:50. The slow stochastic is still embedded, and so Ira's observation that a trip down to the 18-day with an embedded stochastic is often, not always, met with buying is shown valid yet again.
Have a good start to the evening.
TraderJoe
BAC,JPM (wkly) - a couple to keep an eye on.
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SPXcfd (hrly) - pre open -
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SPY 15-min: pretty big difference between where the Dow is (78.6%), and where the SPY is (50%).
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TJ
...and NDX green! Fractured markets...
DeletePer SentimenTrader - no stock in XLE is above its 50ma (for 14 straight days).
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This might be a diagonal in the Dow cash. Can't say whether it is leading or ending. Can't say whether it will hold or not. IFF the high is exceeded before the low, that would be more telling.
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TJ
The deep retraced of diagonals make any early determination particularly intractable. Volatility may be hinting at resolution of dilemma, absent of course any gap higher..,dicey market!
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ReplyDeleteHere's an EW nugget from Prechter and I'm paraphrasing here - When it's difficult to discern a count the fall back method is to simply count the number of waves. 5 - 8 - 13 - 21 are all fibonicci numbers and are evidence of impulse waves. A new high for TQQQ and we will be in the 21st wave up and potentially an end to this impulse which began on May 13th.
Actually it is 5 9 13 17 and 21 waves that equate to impulse waves in either direction
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