Sometimes things bug you, so you keep looking. If you're an Elliott analyst you look for the count that might explain a wave. I could not find a legal downward count from 29 March literally for days. So I kept looking. I tried numerous types of impulses and both contracting & expanding diagonals. Everyone of them seemed to have a problem with either a length violation - particularly for the diagonals - or a flat wave where there shouldn't be one, or even a degree violation. So, I kept looking & looking. Finally today, I was able to parse out this count on the ES 4-Hr chart.
What I think I missed was the wave iv triangle that would not overlap with wave i. While a portion of the triangle does indeed overlap, the ((E)) wave of such a triangle would not, making the count barely legal, but legal and perhaps better than the others. Wave iii is also just barely longer than wave i. It is satisfying enough now that I can move on from that wave.
Wave (ii)/(b) can be a large Expanded Flat wave as the b wave down takes less time and price than the initial (a) wave lower - making it acceptable from a degree labeling standpoint. And wave c of that wave is just slightly over the 1.618 measurement of the a wave subtracted from the b wave - a fairly common relationship.
Given yesterday and today's action, it clearly seems likely we are in a third wave of some type - either a (c) wave or a wave (iii) both of which would likely be as yet incomplete.
Overnight, the retrace of yesterday's down wave was less than 23.6% of the down wave. That may have some implications for the style of this down wave. Right now, the down wave is longer in price than the wave we are showing as (a)/(i). This likely means that yesterday's down wave is a sub-wave i, and today's down is a sub-wave iii or a portion of it. This agrees with the RSI on the four hour chart.
But, as we said yesterday, the daily bias is still down and the intraday bias is still down. They are until they are not. On the daily chart, price did close below the lower daily Bollinger Band.
Have an excellent start to the evening.
TraderJoe
I never knew a wave 4 could overlap wave 1 in an impulse. Your saying that the last up wave of 4 is the only one that can't overlap ? Can a 4th wave be abc and a overlap but c doesn't in a failure and that's valid? Thanks
ReplyDeleteThe triangle is the clearer case because they are 'always' measured to their (e) waves. I've not seen anyone write about the a-b-c failure case. I suppose, based on logic it is possible, but with lower odds.
DeleteTJ
ES (4hr) A bit of perspective -
ReplyDeletehttps://www.mediafire.com/view/2a5eo6jerjr7g0b/4hrperspective.PNG/file
A bigger question would be how this move down fits in starting from the early Jan peak.
DeleteWe all know it can be start of third wave down of big impulse from ath if it gets big enough. You see how that works... Market will do what it does and we find count to explain. Chicken and egg. or we infer markets intentions
ReplyDeleteSPX (cash) (50x3) - High pole alert
ReplyDeletehttps://www.mediafire.com/view/e31baa7lxhiaum7/SPX50x3.PNG/file
BPIs for major indexes - (click to sharpen)
ReplyDeletehttps://www.mediafire.com/view/zwt22g2qvhrpk0i/BPI4-22-22.PNG/file
ES (wkly) - Outside down candle (continuation) -
ReplyDeletehttps://www.mediafire.com/view/yed6llhbguo6em2/ESoutside.PNG/file
👍 appreciate your work GW
DeleteI agree the main trend is down. It seems to me that any analysis, EW or otherwise, is likely to yield unsatisfactory results if a correct view of the main trend does not inform any such analysis. Great observation GW.
DeleteSPX (25x3) - A "closer" look at cash -
ReplyDeletehttps://www.mediafire.com/view/4ag0efyrq2h0i89/SPX25x3.PNG/file
A new post is started for the next day.
ReplyDeleteTJ