With five-waves down in the ES futures (waiting on a potential retrace or move up), I thought we'd have a look at the US Dollar Index futures today. Remember, we called a low in this index in 2021. That low has not been broken. Below is a chart with 132 bars, each of which represents 2-days. The 132 bars is used to agree with The Eight-Fold-Path-Method for Counting an Impulse, requiring between 120 - 160 candles for 'The Wave of Interest'.
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| US Dollar Index Futures (DX) - 2 Day - Sideways |
For about the last month-and-a-half, since the high labeled Minor 3, price has been consolidating sideways. Of interest, this move may have started with a contracting leading diagonal according to the signature from the Elliott Wave Oscillator (EWO). Note the declining and diverging peaks as price moves forward and the contracting pattern of waves minute ((ii)) and minute ((iv)), and the overlap of waves minute ((iv)) and minute ((i)). Then, the EWO sprints to a higher peak, and is now declining. This could represent waves Minor 3 and Minor 4.
If so, then only one higher high in five waves is needed to complete an impulse wave to the upside. Yes, there is a risk of overlap of wave 4 on wave 1, so that needs to be watched for. But, if overlap is avoided, we think the pattern might be able to make an Intermediate (A) wave up, until there is a substantial retrace lower.
Keep your eyes on this one, as a spike up might come on increased interest rates and/or be simultaneous to a drop in Gold.
Note: The Eight-Fold-Path-Method for Counting an Impulse is the featured post on this site, in the upper right-hand corner of the main blog page.
Have an excellent rest of the weekend.
TraderJoe
LULU (mthly) Log scale - any validity here? [if interested]
ReplyDeletehttps://www.mediafire.com/view/xyf4vxtpp7ashzt/LULU.PNG/file
You might do well to segregate out the potential C wave and see what it's EWO signature looks like in 120-160 candles. The peaks in a diagonal are usually not cut off.
DeleteTJ
BABA (2wks) 3PDh - [if interested]
ReplyDeletehttps://www.mediafire.com/view/znr5segdsv7pvtw/BABA.PNG/file
Using your flat diagram, you could also apply J. Kennedy's channeling technique for flats. Connent beginning of 'A' to peak of 4th of 'C', with parallel from end of 'A'. Look for completion of 'C' between midline/channel btm.
Deletehttps://www.mediafire.com/view/7m4n7donadvo6sz/expflat.png/file
Nice work Amit. Thanks for sharing. Previous 4th wave was 1820 low.
DeleteRe Amit 8.01am, do following raise any bells?
Delete1. Length of B relative to A?
2. A is irregular and the larger-degree A-B-C (C to come) is also an irregular?
TJ - How probable would a ending diagonal be from early December low in SPX? We would be in wave 4 now and it would need to pullback a little more. I think this is a good alternate to the expanded flat. Thanks for your work.
ReplyDeleteSee Dec 30 & Jan 4 posts.
DeleteTJ
MSFT - current
ReplyDeletehttps://www.mediafire.com/view/gbvmezv8z1nj3hn/MSFT_-_breakout_retest.PNG/file
Applying Amit's flat diagram to current posited expanded flat -
ReplyDeletehttps://www.mediafire.com/view/giyfon4gep86y04/AmitDiagram-overlay.png/file
Who's adaptation from EW Principles is this?
I think Neely in "EW in Motion" book had:
Delete1. b < 1.382a else expect probably an Irregular Failure.
2. c = 1.618/2.618a (which would imply 0.236 below end of a).
TJ, what is the guideline from your own experience?
Measuring expanded flats -
ReplyDeletehttps://www.mediafire.com/view/oy675z1v04gb6qm/Eflat.PNG/file
CVI (mthly) - North?
ReplyDeletehttps://www.mediafire.com/view/ydsqd7skb6bcaii/CVIm.PNG/file
Us 10y bond yield looking very much like a cup and handle bottoming pattern on the weekly chart. If so, it's starting to break out. Good luck all.
ReplyDeleteGood morning all.. the NQ futures broken the prior daily low. Dow & S&P have not. Here is what the wave looks like, so far.
ReplyDeletehttps://www.tradingview.com/x/sZAoX8Yy/
What I don't like about a (i)-(ii) count is the very small retrace. So, it is the alternate, so far.
TJ
SPY - open gap area just below [455.40-456.32]
ReplyDeleteLooks like we have just started the Cycle C wave down in Japan after a series nested 1,2's. Long way down....IMHO
ReplyDeleteJapan and had a long wait for the U.S. Markets to top.
https://i.postimg.cc/CMzcDLsB/Screenshot-67.png
It appears to me that we are now in a expanded flat from November highs. SPX
ReplyDeleteSPX - a hypothetical exp. flat - (click to sharpen)
Deletehttps://www.mediafire.com/view/erpxc3rp7cg7vqv/expflatspx.PNG/file
ES - Daily - this morning's futures low is still +13 points from any length violation for a diagonal wave. Cash SPY has not invalidated either. If it does, I will be quick to conclude the "alt: top" is in. But, for now I am 'strictly' going by lengths and measurements, and not opinions, other market counts, etc.
ReplyDeletehttps://www.tradingview.com/x/FfAoThuz/
In short, it is less than 20 points before we know the answer, and the market metrics available to me are not good enough to sort out the up case from the down case without guessing. A lot will be determined by where today and tomorrow finish.
That's as far as wave-counting goes. As far as trading might go, I will only offer this paraphrase of Ira's advice: the NQ is at the lower daily Bollinger Band and slightly below the 100-day SMA, and so he advises "no 'new' shorts be opened there as the probability of staying below the band is only 5% of the time, and that is often a place where the so-called Smart Money takes some off the table." Clearly, there needs to be a percentage of the time when he is incorrect, but it does buck the odds.
TJ
I'm watching the Russell 2000 as a guide. It's been in clear distribution for a year now. It has not broken below the lower level trend line yet. Needs to close below 2120 on a daily basis and then decline further. That would signal markdown. My guess here is the major indexes would soon follow when that occurs. This is backed up by continued decline and divergence on the cumulative advance-decline lines on the NYSE. I would be careful of bearish calls at this point.
ReplyDeleteSPY 30-min: here's a parallel to keep an eye on, and to watch for any overlap, if it should occur. Note: in another half-hour or so it might be possible to see if the MACD cross-upward sticks.
ReplyDeletehttps://www.tradingview.com/x/9KvAEZvx/
TJ
SPY 30-min: MACD up-cross has held into the next half-hour.
Deletehttps://www.tradingview.com/x/ZRJ7Wc8D/
TJ
Expanded flat - Two questions of measure Thanks!
ReplyDeletehttps://www.mediafire.com/view/90rmnn3nwck9n54/Measures.PNG/file
I'm thinking the beginning of 'a' and c' are the points used, regardless of where 'c' terminates. Is this correct?
DeleteThanks!
Testing btm of opening gap and OR high. Daily pivot around 468.80ish.
ReplyDeleteTypo - pivot around 466.80ish
DeleteSPY 30-min: now approaching upward paralell.
ReplyDeletehttps://www.tradingview.com/x/XlrfIAlU/
SPY 5-min: now a 1.618 wave extension, and a new upward channel drawn.
https://www.tradingview.com/x/CJNcQCL2/
TJ
SPY 5-min: looks like the (a) wave, up, might be in place with upward overlap.
Deletehttps://www.tradingview.com/x/sTkeTVJY/
If not, only iii of (a).
TJ
Important..further note: sometimes the (a) wave in a daily diagonal comes out very near the upper trend line. Therefore, if the wave degrees are dropped one degree, this could also just be the 'i' wave of (a).
DeleteTJ
NQ daily: not trading or investment advice - just an example - and a paraphrase of an Ira Epstein trading guideline.
ReplyDeletehttps://www.tradingview.com/x/PfES7zEg/
TJ
Thanks TJ,
DeleteThe NQ is still below 18/100 day avg. and ES and DOW 18/50 day. Bias is still down.
Looks like the major indexes closed with reversal bars today. I wanted to post SPY chart showing VFI indicator and the FVE indicator. Both were created by Markos Katsanos and published in Stock & Commodities magazine. VFI is diverging SPY new highs. Volume Flow Indicator (VFI) is based on OBV but does a better job diverging at peaks. Finite Volme Elements (FVE) is another money flow indicator that does a good job detecting break outs. Watch for reversals in the FVE for signs of a bounce. Price diverges and positive slope on the moving averages is key.
ReplyDeletehttps://www.tradingview.com/x/s0CQbMGT/
TLT/JNK (wkly) - a ratio worth monitoring (log scale)
ReplyDeletehttps://www.mediafire.com/view/nf0iybgqfp3wn6l/TLTJNKw.PNG/file
👍 Great chart. Thanks
DeleteGood morning all. I know a lot of you were discussing this yesterday. Here is an example of a likely '(b)' wave that went beyond 1.618, and then made a lower low than '(a)'.
ReplyDeletehttps://www.tradingview.com/x/wWEFz4ld/
Note that almost all of the wave occurred in the overnight without the institutions trading, so, it is 'likely' corrective.
TJ
..and, of course, this down wave is much lower now at ~4,630 already.
DeleteTJ
..and certainly, one can argue that it is somehow really the fifth wave up, but then, the fifth wave up does not make a new higher high in the SPY cash market.
DeleteSo what is the rationale for the move? It is to make at least a 38% retrace on the original move up, which it now has.
https://www.tradingview.com/x/X9Wh8OBu/
TJ
Does the rally off yesterday's low to the high have the elements for it to be labeled a five-wave move? Maybe an A wave (or wave i) with B (or ii) underway this morning?
DeleteYes. Addressed above at 4:06pm.
DeleteTJ
SPY - yesterday's "missed" daily pivot has been hit. Weekly pivot (470.xx) remains untouched.
ReplyDeleteSPY 10m - confluent "missed" pivots above
ReplyDeletehttps://www.mediafire.com/view/hnug9e5y81agqlz/SPY10.PNG/file
SPX - crunchin' the numbers - 1st 5 days of the year (fwiw)
ReplyDeletehttps://www.mediafire.com/view/blfzo9ryfrjk3yx/First5.PNG/file
SPY 30-min: has now exceeded the prior (b) wave high, and is in a lower degree five-waves-up on the 5-min chart.
ReplyDeletehttps://www.tradingview.com/x/zoYZKQzf/
Five-minute chart has > 1.618 wave also.
https://www.tradingview.com/x/Y03msUvl/
TJ
SPX (wkly) Stocks above 200 ema -
ReplyDeletehttps://www.mediafire.com/view/92qweq6rkhwuuvy/above_200.PNG/file
An aside - RSI, old school meets new school [if interested]
ReplyDeletehttps://www.mediafire.com/view/x3gtqe0cwjnjdxz/RSIswingfailure.PNG/file
SPY 5-min: so far in cash there is 5-3-5 up to 18-day SMA.
ReplyDeletehttps://www.tradingview.com/x/WNFzUkRX/
In today's wave micro ((5)) = micro ((1)), and micro ((5)) sub-divides into five sub-micro waves (1) - (5).
Of concern, momentum upward is already wheezing. Not sure if they will try to gap up over the 18-day or find resistance at it. Looks for clues, like any downward overlap, etc. in the overnight.
TJ
A new post is started for the next day.
ReplyDeleteTJ