So, the FED says tapering could start and if it does it might be expected to be over by the middle of next year. However, no inference is to be drawn, if it does start, that interest rate rises would start soon after. So the market thrashed around a bit; nothing serious.
We have written over the last several days that there are only three-waves down, so far. There might now be the makings of a fourth wave, but, the market must simply prove that to us. If prices bust the larger down channel, upward, by a significant amount, and if they upwardly overlap the a/i wave, then we must conclude there were only three waves down.
Three waves down could start a larger diagonal, so it does not mean the down trend is completely over if we get an upward wave with overlap. On-the-other-hand, the market could impulse lower by making a lower low. With about 146 candles on the ES 2-hr chart, there is the potential for a fourth wave signature on the Elliott Wave Oscillator. The question is only whether a fourth wave holds or not in this area.
The warning sign is that on the ES 30-min chart it is possible to count a contracting diagonal upward, so that if today's FED high is exceeded, it might start a larger c wave up. I can see both sides of the coin at this point, so the market will have to make-the-call.
Have a good start to the evening.
TraderJoe
iii may have not completed
ReplyDeleteiii, what? iii down?
DeleteVIX - closed gap today. Should close above 20 if market headed lower.
ReplyDeleteFWIW, that is not what happens typically during a third wave decline. It is however, a market that is showing many things that are un-precedented so one has to keep an openmind imo.
DeleteAside - FCX (wkly) Idea courtesy of Kimble Charting -
ReplyDeletehttps://www.mediafire.com/view/vtj5v9mo405h43u/FCX.PNG/file
10 year treasury has coiled so tight up or down is a break out. Stocks above 50 day moving average, 50 day moving average slope is still pointed down. TLT had some above avg volume to it move higher at the close.
ReplyDeleteThanks ET!
EurUsd (wkly) - Another way to view the Dollar -
ReplyDeletehttps://www.mediafire.com/view/e1laiiaczp7wrd1/EurUsd.PNG/file
SPX cash gap filled.
ReplyDeleteTJ
SPY 30-min: yesterday's pre-FED diagonal was leading.
ReplyDeletehttps://www.tradingview.com/x/fCIjAvLD/
TJ
SPY 30-min; taps into the 0.618 Fibo extension, shown above.
DeleteTJ
My morning prayer.
ReplyDeleteEvery great cause begins as a movement, becomes a business, and eventually degenerates into a racket.
ES 2-Hr - chart in post - wave a/i down has been overlapped upward, confirming it as just an 'a' wave.
ReplyDeleteTJ
SPY 30-min; may not be done yet, but there appears to be five countable waves up, and they might even be of smaller degree.
ReplyDeletehttps://www.tradingview.com/x/OFKeHpl2/
TJ
SPY 30min - add'l perspectives in concert with EW
ReplyDeletehttps://www.mediafire.com/view/kuibblz84a6jq0r/SPY30.PNG/file
Three add'l things of note regarding this week's ORs -
Delete1. Extension of Monday's lower OR level provided support all day Tuesday
2. Tuesday's midline essentially became Wed's upper OR
3. Note the upward stair stepping of ORs this week so far
Just a few nuances.
So when this B wave completes, we should see a 5 wave drop in C to complete that leg of the correction from the peak> If so, should we label that Wave 4, thus an impulse Wave 5 expected? Or, something else more corrective?
ReplyDeleteKev .. have you heard of diagonals? Just wondering. Do you know clearly how they work?
DeleteTJ
SPY 5-min; now back to the area of the prior fourth wave (4).
ReplyDeletehttps://www.tradingview.com/x/m9zahXpz/
TJ
There is a new post started for the next day.
ReplyDeleteTJ