Yesterday we said it was very possible we had only made a non-overlapping fourth wave up into earnings reports for APPL and AMZN (see the post at this LINK, if needed). Amazon, as you probably know by now, made a mess of things and sent the first wave of overnight prices lower. Others followed. This resulted on the ES daily chart, below, in one of the slightly more rare events - a gap in the ES contract itself, and not just cash, at least the way TradingView is showing it. Granted some of the gap is created by the crazy settlement times versus the times the contracts stop trading. In fact, broker quotes don't show this gap for the ES at all.
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| ES Futures - Daily Chart - Likely into a Fifth Wave Lower |
Regardless, prices continued to head lower. We counted an initial :5, down, and then a very short :3, up. Then another :5 down to the lower daily Bollinger Band and slightly beyond. In the process, the ES futures undercut the 15 March lows, but they have not yet exceeded the February low. It is getting more likely that will happen.
Because the down wave may be incomplete with just 5-3-5 lower, so far, it is possible that Monday will see more downside. Right now on the ES 30-min chart, the intraday bias ended lower to agree with the daily bias ending lower. Near the end of the session, price was trying to close inside of the lower band rather than outside of it.
The big question for wave-counters is this: the current down wave from the March high is shorter in both price & time than the down wave from the all-time high. Will it remain so & qualify as a sub-wave from a degree labeling standpoint? If so, we might reduce the degree labels on this wave.
And, with price having contacted the lower band today, we don't wish to get too negative on the price structure, because, as Ira says, "this is a place where the Smart Money is likely taking at least some of their profits". So, shorter term some caution and review of the sentiment indicators is warranted.
Have an excellent start to your evening & weekend.
TraderJoe
SPX (cash) - (50x3,25x3) - Measures
ReplyDeletehttps://www.mediafire.com/view/utv0gckiy462kzf/Measures.PNG/file
https://schrts.co/aetfrgmF
ReplyDeleteI find this chart interesting. The VIX has had bigger spikes when fed funds rate is going down than up. Makes sense since the yield curve is usually inverted when they start lowering rates. Do they really think they can get the neutral rate above 3% without breaking something. I doubt it.
https://schrts.co/uhUZqzwC
ReplyDeleteSPX - we have a lower closing low below the BB and the VIX is at a lower closing high. RSI has a positive divergence and ROC is stretched. Stocks above the 20 dma at 11 and other sentiment readings are bearish. We should see a bounce next week but from what level. Would like to see C=A at 3933.
SPX - Fib turn dates - 89 days from bottom is May 24. 144 days from top is May 30. We shall see
DeleteSectors - status
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TSLA (10x3) - toppy ?
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BPIs - major indexes - NDX bull alert!
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DBA - 2 views (wkly,[.25x3]) - possible near term weakness
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ES (mthly) Can we get an uptick?
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Many of the indices appear to be rolling over on a monthly basis as evidenced here by the S & P 500. The swing line now has lower lows and lower highs and closed below the 18 month moving average, for the first time since March 2020. https://stockcharts.com/acp/?s=%24SPX
ReplyDeleteNoticed that too, but like all breaks of moving averages, one reading below is not confirmation just yet. Follow through in May will be needed.
DeleteMSFT (4x3) - current
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Ordinarily bullish technicals in bear market can be deceptively treacherous indeed. We saw the exact opposite the last several years as the FED liquidity storm repeatedly capsized anyone riding a bearish raft. If a reduction in degree labeling is applicable, and I believe the possibility of a beginning third down at multiple degrees would make this the case, folk are about to learn what worked in a bull market does not necessarily during a bear market. Talking heads are already bleating about the FED having to "capitulate" on their hawkish posture. While that is a tacit confession as to the artificial nature of the 14 year bull run, it also exposes their apparent ignorance of the real reason the FED is hiking rates, namely, ultimately they follow the market.
ReplyDeleteI don’t consider us in a bear market until the the bottom trend line from ‘09 & ‘20 is broken. Arbitrarily picking down 20% as a bear market I think is silly.
DeleteSeveral very good analysts agree with you and continue to publish bullish wave counts. Silly or not, the 10% correction and 20% bear designation for declines is the convention, in the current case substantiated by DOW theory, imo.
DeleteFrom the ATH there are two down waves with different angles of decent. The first one is an ugly beast. Makes me wonder if this is not just the first wave of a larger diagonal.
ReplyDeleteI have heard that MBS can take months to settle, so we shall see. So far balance sheets going sideways, market going sideways.
...see below @ 11:59 am. TJ
DeleteTHX
DeleteBPI - a closer look at "bottom" turnarounds in general (via NDX)
ReplyDeletehttps://www.mediafire.com/view/50rety5czagl34f/NDXbpi.PNG/file
Keep in mind that our new "4" can turn into a "3" or "2" going forward.
DeleteOne might also notice that our last long column of "X"s was the highest since around mid 2020, and our subsequent low is higher than the prior in earlier 2022. (higher high, higher low) [to date].
DeleteA couple of items fyi - going forward. First is the demarcation between a sub-wave and a wave of the same degree. That level is 3,924.50 as shown in the link, below.
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If on this stab downward that level is exceeded, then more than likely the waves would be of the same degree and be labeled (A)/(1), (B)/(2)..etc.
Next is the idea that the first :5 down was a pretty 'hesitating' move down and difficult to count with an overlap. Therefore, one should not rule out the possibility that the down wave is forming a 5-3-5-3-5 diagonal, as follows.
https://www.tradingview.com/x/sQ5AdaOf/
For the contracting variety this wave down would still need to resist equality with the first wave, and then it would need to form a shorter :3, up. At that point, it may be virtually 'indistinguishable' from a (1)-(2)-1-2, down. But it is too early to have high confidence in these yet. So, these are items to keep 'in the back pocket' at this point until we get additional measurements.
TJ
Should the diagonal occur as shown, this would appear to eliminate it as a "C" of an expanding flat as the diagonal would be leading.
DeleteExcellent, the second chart would certainly vibe with what the aaii is saying.
Delete👍 thanks
Delete@GW, yes, as far I can tell the 5-3-5-3-5 contracting diagonal could not be part of an upward count. TJ.
DeleteBPI - NDX (line chart) For those that may find it easier to "read" in line form (vs PnF), there appear to be some positive signs coming from the NDX (supplement to 11:39am post of BPI).
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ES (5x3) early look -
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Feb 24 low now exceeded.
Delete100% low pole (accumulative)
DeleteNDX (2hr) - possible consolidation/bounce
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Addendum: NUSI (.1x3) as quasi-proxy for NDX [if interested]
Deletehttps://www.mediafire.com/view/vxqrmnj3za8rjbo/NUSI1x3.PNG/file
So, with the NQ, RTY and ES at new lows, the question becomes, "what about the Dow?". Is it going to hang up here all by itself??
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Crude (1x3) Current observations - [if interested]
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ES 30-min: caution as wave (iv) might be an expanded triangle to alternate with a flat wave (ii).
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TJ
ES 2-min: five waves down from ((E)) of triangle; suggests monitoring the high to see if exceeded or not, (and certainly could go lower first).
DeleteTJ
ES ..new low of day; expanding triangle confirmed.
DeleteTJ
ES (5x3) Broadening btm ?
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Vertical target of 4080 reached.
DeleteES 30-min: chart update.
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TJ
ES 30-min: fyi - price nearing S1 daily pivot @ 4,077
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..tag of S1. TJ
DeleteES (5x3) A dash of conjecture - :o)
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ES 30-min: possible to get (v) = 0.618 x net [(i) through (iii)].
ReplyDeletehttps://www.tradingview.com/x/VrJXjpOc/
TJ
Upward overlap on SPY. TJ
ReplyDeletePossible to see "first of the month money" being deployed. Watch for a 62% retrace.
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ES (5x3) Low pole reversal
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A new post is started for the next day.
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