If you are a decent Elliott Wave analyst, then there are just sometimes when one needs to wait for their answers. Today is such a time. Based on the down count in the previous post (a 'possible' expanding diagonal, followed by a 'possible' flat wave), we were indeed expecting 'five-waves-up' off of the low. Most of that five-waves-up is complete, as charted below.
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| ES Futures - 1 Hr - Flat Wave or Not |
Over on the left, in the tan box, you can see what might be the ((a)) wave up, and the ((b)) wave down to a marginal new low of what might be a flat wave. From that sequence, we were expecting five-waves-up, and you can see that labeled inside of the upward blue parallel.
The up wave has exceeded a 1.618 external retrace on the potential ((b)) wave of the potential flat. That does lower the odds a bit that what we are seeing is a flat.
IFF the all-time-high holds, then it is possible there is a diagonal down and a flat wave up to a deep retrace of the potential diagonal. IFF the all-time-high does not hold, then the down pattern is some sort of strange double-bottom which is difficult to fit into any count although somehow it might be a weird triple zigzag second wave or possible wave of a triangle from the all-time high.
Arguing against the flat wave are 1) momentum - there has been little retrace thus far, 2) bias - price is above the 18-day SMA and 3) stochastic - while over-bought it has not curled down yet.
So, these are the factors to consider. A good analyst does with it little bias or concern for the outcome. Why even consider the diagonal and the deep retrace? Why would someone take the time and effort to write about it in their Elliott Wave book (The Elliott Wave Principle by Frost and Prechter) if such outcomes were not at all realistic? And, why write about a potential flat where the ((c)) wave may be pushing on 2.0 x ((b))? Because why then would an author write about extended flats in his Elliott Wave book (Mastering Elliott Wave by Glenn Neely), if such outcomes were also not realistic?
For our part, we will watch and learn and count. Have an excellent evening.
TraderJoe
I think if you look at big cap stocks individually and look at their wave count, you might draw a better conclusion if we are going down or up after this 5 is over. I haven't been able to determine. On upside there are two possibilities..1. The move that started in october still had 5th to go so its completing that right now. 2) from October to last high we completed firsr wave so the next move up will be powerful... i hope your probable count of ld down is right...so i can buy more at the end of c(assuming ld would be a)
ReplyDeleteI see 5 down in the Dow,but the SPX is to convoluted to say the same. The only thing bearish about this whole market is I see a 5 point reversal top that could be in play tonight. Secondary rallies usually retrace 2/3rds of the decline and the markets did that plus(70pct). If it falls out of bed tonight at least it patterns as a top.
ReplyDeleteWhat does the rules say about the possibility of your complete abc being a of an abc up. Me thinks we can have a b wave and a c to come 5o a final high around 4830.
ReplyDelete5 hr chart sporting a massive flag. Chart patterns nowadays have to be viewd with great caution as we have all learned, but this seems to indicate a powerful upside move ahead and not what I anticipated...Powell remains firmly in charge it would seem...at least for now.
ReplyDeleteyes, a 'flag' could still be counted like this. The benefit of the wave count is the clear and precise invalidation levels for a triangle.
Deletehttps://www.tradingview.com/x/5SQaAKcm/
Below the 'c' wave - without a new high - a triangle invalidates, and a flat or lower wave have to be considered. Similarly, a triangle implies that wave d will be exceeded higher, and if not, that is a warning.
TJ
meanwhile the ES half-hour intraday screen shows where the local fractals are that could indicate short term direction, and the Bollinger bands provide an indication of very short-term support and resistance.
Deletehttps://www.tradingview.com/x/B6YX3r1P/
The chart is behind, as usual the 10-minutes or so, the first green 'up' fractal back has already been exceeded higher.
TJ
VIX daily - gap closed. Maybe we get a bounce with some Vol around CPI report and fed next week. I don’t think we see a higher high at this time because of seasonals and pre-earning season run up. ATB
ReplyDeleteES 30-min: intraday screen, first up (green) fractal back has been exceeded higher.
ReplyDeletehttps://www.tradingview.com/x/XPw0PTEt/
TJ
ES 30-min: another fractal is now valid at the low & it is a double-btm.
Deletehttps://www.tradingview.com/x/nmqk9ODD/
TJ
ES 30-min; fractals at the double-bottom low defeated lower. Cash SPY would really, really strain a parallel - more than it is - if it were to make a larger fourth wave lower.
Deletehttps://www.tradingview.com/x/CCSRId9S/
TJ
I want to see how this resolves. The Nikkei futures real time 45 minute chart.
ReplyDeletehttps://i.postimg.cc/K8mFtfdK/Screenshot-27.png
Bitcoin vs the Dow
ReplyDeletehttps://i.postimg.cc/FzMPjhGy/Screenshot-28.png
https://i.postimg.cc/28qyyrPH/Screenshot-29.png
naw .. no offense meant .. just talking shop here .. but those are 'not' well-thought-out charts. You are doing what most people start out doing and putting some numbers and letters on a chart; not necessarily following the rules and guidelines. Here is how the Dow would be counted if we are in a (i) down and (ii), up.
Deletehttps://www.tradingview.com/x/h07zQ81r/
The biggest give-away is that "usually", "most-often" the largest gap is in third wave. Your chart does not recognize that. Your chart also does not recognize that something like a flat wave is possible. It just labels every peak from the high to the low because that's what your eye sees.
Also, your chart doesn't recognize 'degree labeling'. In other words, you 'claim' a smaller degree wave i, on the way down, is larger in price than it's immediate larger degree wave 1, also on the way down. That violates the very definition of the term 'degree' - where smaller degree waves are 'actually' smaller than their larger degree counterparts.
Again, no offense meant, but I will not be posting charts of this quality in the future as I do not want my readers to get confused. Hope this provides some points of learning.
TJ
To Newbies:
DeleteAs a long time reader of this blog (several years and counting), I've seen this post/explanation many times and no-one should take offence. It's a good reminder for the folks who are new joiners to the blog. The discipline around these simple 'high level' requirements are the things that make this blog and TJ's work exceptional compared to the plethora of analysts who slap waves on charts on the internet.
No offense....thx TJ
ReplyDeleteI just encourage you all to try an exercise like this:
ReplyDeletehttps://www.tradingview.com/x/4tQrl3ye/
Because once you see it - the way Elliott did - you'll never forget it.
TJ
..and here is a follow-on showing a lower low. See the notation to the side.
Deletehttps://www.tradingview.com/x/de0nZuXL/
TJ
..then draw your parallel, and see how it goes from a momentum stand point.
Deletehttps://www.tradingview.com/x/LwG5j6zl/
TJ
A aside - TLT (mthly) 3PDh ? Potential long term target
ReplyDeletehttps://www.mediafire.com/view/h9egxbxu32ecb9u/TLT3PDh.PNG/file
How did you come about finding or studying that?
DeleteWith Gold making higher lows inside the alligator's mouth I'd assume it's some sort of shallow b wave looking at weekly chart.
ES 30-min: digressing from the exercise a moment, the low of what "could have been" the c wave shown earlier this morning of the 'potential triangle' in the ES, the bulls hope for a 'pennant', has just been taken out lower. The potential triangle is invalidated and it looks like a diagonal of some type is forming lower.
ReplyDeleteSo. we should not be looking for full impulses lower, but series of a-b-c's.
https://www.tradingview.com/x/5NHKCrmt/
TJ
..so, the equivalent in SPY; more than likely we are looking for something like this.
Deletehttps://www.tradingview.com/x/WVYHTHwG/
TJ
ES futures 15-min: ended near the low of the day. The count might look something like this.
ReplyDeletehttps://www.tradingview.com/x/jCks8Lkb/
Watch the 38% and 50% Fib retrace levels. The only problem I have with it is that a fourth wave way down there makes a mockery of a parallel. Possible, but slightly lower odds.
TJ
Two interesting charts from the boys at EWI - (courtesy of free email)
ReplyDeletehttps://www.mediafire.com/view/7dslll7lac9buaj/2fromEWI.PNG/file