From a price action & algorithmic trading standpoint today is not at all difficult to understand. Prices today got down to the lower daily Bollinger Band. And what does Ira say about the lower band? Things like 1) Smart Money will likely be taking some profits, 2) no new shorts below the band. So, prices got to the lower band, and then they rebounded to finish positive.
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| ES Futures - Daily - Lower Band Hit |
It also wasn't hard to understand from a trading psychology standpoint. All day the "talking heads" were yakking about bear market territory. This typically happens at/near a low rather than at/near a high. It did again. Further, it was Friday, and a lot of big traders will lighten up before the weekend - especially with a war raging - and then reassess when the new week starts. So that fits, as well.
From an Elliott Wave perspective price made only three-waves-down (see my last comment in the prior post to see how the three waves were made). Thus, as bear-markety as it seemed, it might be only the "B" wave of a flat or it could be the third wave in a diagonal. How would the diagonal work? Like in the following chart.
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| ES Futures - Daily - Potential Diagonal |
As always diagonals are waves that must prove themselves in every detail. A potential diagonal as shown is not a reality until all five waves form properly. We will see if such a thing can happen.
So regardless of the algorithms or robotics involved, we just keep our heads on, and our minds engaged and try to determine the next most likely wave count. Such a count might also again work with the daily Bollinger Band if it slips lower on Monday/Tuesday. We'll just have to see. Remember, in this count, minute wave ((iv)), circle-iv, would have to remain shorter than minute wave ((ii)), circle-ii. And the same for minute ((v)) remaining shorter than minute ((iii)).
This is a great way to keep the market compressed and grinding most trades into submission.
Have an excellent start to the weekend,
TraderJoe
Many thanks.
ReplyDeleteDitto. That, in my opinion, is one important chart. It explains the absence, so far, of a VIX capitulation spike to conclude a decline at this degree of trend. Thanks T.J.
DeleteCould the diagonal have completed today. Thks
ReplyDeletePrior to publishing this post, I checked three other diagonal possibilities. The problem with all of the others is one of the two following: 1) either they don't hit their diagonal trend lines, or 2) they are non-proportional in terms of their internal retrace waves. In the link of the hourly S&P500 is the best internal structure I can find, but it would be incomplete at this time, still with room for further whippy-to-upside movement for ((iv)).
Deletehttps://www.tradingview.com/x/03woW7jK/
TJ
Thanks
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Delete@Pd .. no. Neither pattern is a legal Elliott Wave pattern. In the first instance of the expanding diagonal supposed wave (3) must 'by rule' be longer than supposed wave (1). And then (5) must, again, by rule, be longer than (1) and (3). In short you don't know the basic definition of this pattern or how it measures by the rules. In the second instance (long term), you claim wave (1) is the 'extended wave'. But here again, you don't know the definitions of the patterns. When wave (1) extends, it is the longest wave 'by points', always. In your supposed scenario, though, wave (3) is clearly longer in 'points'. True than wave (1) is longer in time: not good enough to meet the definitions.
DeleteYou should not be charting on wave sites, or, especially, trading with Elliott wave if you do not know the basic definitions. I recommend you read, "The Elliott Wave Principle" by Frost and Prechter, with a specific focus on the Rules and Guidelines, the definitions of the patterns, and the definitions of wave degrees.
TJ
dand joe ouch! anything else wrong here? https://www.tradingview.com/x/wx8UDJGV/
Delete@pd .. I stand corrected about the length of the waves (as you are seeing them), and went a step further to validate it in the futures. Your wave (3) would be a bit shorter. But, no one is counting the middle sequence from 2018 to 2020 low as anything other than a 'flat' and not an impulse. And that means that wave (3) would be the longer one. That is, any impulse would have ended in 2018, and would knock some points off of it, invalidating the extended first wave idea. Next, you do 'need' a higher high to prove your case. So far, it is not in evidence, but, yes, anything 'can' happen. Powell 'could' relent. Lastly, with only 'three-waves-up' proven, that can still be the (A), (B), (C) of a Primary ((B)) wave or 'b' wave at Cycle degree.
DeleteTJ
SPX (cash) - Observations
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IWM - Observations
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BTC (30min) - A couple of ways to measure (H&S) [if interested]
ReplyDeletehttps://tvc-invdn-com.investing.com/data/tvc_b19f75589fcbfe050e5b0e38b230df76.png
SPX (25x3) - 3700-25 area of interest -
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ES (5x3) Sunday evening look -
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SPY 5-min: here is the opening 45-min or so. Let's see if this wave wants to hold the parallel or not. The retrace is over 23.6%.
ReplyDeletehttps://www.tradingview.com/x/AYDvU7aZ/
TJ
SPY 5-min: the higher highs 'could be' the (a) wave in a wedge.
Deletehttps://www.tradingview.com/x/u3TMtkqL/
TJ
SPY (30m) - updated observations
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ES (5x3) - Current
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Next target area 4045-55.
DeleteES 30-min: now that the ES, too, has made a new high looking at the intraday wave-counting screen suggests monitoring the tentative trend line shown and looking for a break and a back-test.
ReplyDeletehttps://www.tradingview.com/x/W91nUvvJ/
Will have more to say about it later.
TJ
Utes (dly) - On the move (up) again? [if interested]
ReplyDeletehttps://www.mediafire.com/view/dnlmksuogpbklm0/Utes.PNG/file
ES 30-min: I'm thinking ES might be countable to today's high along with the SPY in this manner. (Use brown trend lines).
ReplyDeletehttps://www.tradingview.com/x/qwOei1Fs/
I would like to see a (dotted blue) trend line break tomorrow to better define a (b) wave lower.
The alternate is that (a) formed a bit earlier and (b) will be some kind of 'flat' wave or triangle. You know corrections. They can be a bit goofy.
TJ
any possibility thats ending diagonal of expanding flat?
Delete..yes; it is a possibility to watch.
DeleteTJ
There is no doubt tonight with the gap down, that we have had the suggested trend line break. But, one has to simply say "good luck, best wishes" because it 'can be' a "B" wave, and they can take so many forms. Also, there is an outside chance it is more than that, as per marc's comment, above.
DeleteTJ
I am truly fascinated by the response of some analysts, to what has unfolded in markets the last seven weeks, particularly those publishing bullish impulsive counts at high degree off the March 2020 lows. One in particular defends his bullish stance by plaintively insisting that he can count ONLY three waves off the March 2020 lows therefore the "impulse" must be incomplete. I was dumbfounded by the obvious irony of the argument until it dawned on me it was an argument of necessity: to concede a major market top with ONLY three waves would totally invalidate prior published wave labels. I am not being critical here, just genuinely bewildered, and here is why. The signals were abundant and they were imho stentorian; a few were NYAD divergence, DOW Theory non-confirmation, MA crosses, and a remarkable FOUR confirmed H.Os on the clock SIMULTANEOUSLY. Apparently none of these informed the many bullish counts insisted on by so many. Remarkably, neither has the price action, some metrics unprecedented by decades, of the last several weeks. Will they be proven right? Perhaps. Bullish counts have not all been invalidated. One analyst says he is maintaining his bullish trades and "hedging" those pisitions! The point of this long-winded exercise is to acknowledge this site as one of the few that was counting a high degree corrective wave to the recent ATHs. Surprised few, if any blog readers have commented on this. Kudos to T.J. for imho, getting it right!
ReplyDeleteGood morning all. ES 30-min - here is the intraday wave-counting screen with updated daily pivots and local fractals.
ReplyDeletehttps://www.tradingview.com/x/aNkuVhn9/
The ES has not (yet) made a lower low than yesterday. The NQ have. Could get whippy and testy today. Might want to watch the fractal breaks closely. We note another three-touch potential trend line, and note the intraday Bollinger Bands are squeezing in which often precedes a more trending move.
TJ
ES 30-min: first down (red) fractal back exceeded lower.
DeleteTJ
ES 30-min: second down (red) fractal exceeded lower & new low below yesterday's low.
DeleteTJ
ES (5x3) Downward targets/pivot -
ReplyDeletehttps://tvc-invdn-com.investing.com/data/tvc_efa03255fd200d4d7f0e8c70e0c65226.png
ES 30-min; now a 62% retrace on up wave.
ReplyDeleteTJ
Here is SPY 15-min: testing 62% retrace.
ReplyDeletehttps://www.tradingview.com/x/eqfwJ5Qm/
TJ
SPX (2wks) Parallel TL hold ?
ReplyDeletehttps://www.mediafire.com/view/pdn0uf7phb7ssd3/SPXparallel.PNG/file
Addendum: How about a confluent (virtually perfect) channel to boot?
Deletehttps://www.mediafire.com/view/k1sph975arnbd6e/SPXchannel.PNG/file
yes, actually pooldawg, above, posted your 'confluent channel's earlier in the day, and I posted a version a couple of months ago.
DeleteTJ
Consider it in (unbeknownst) deference. :o)
Deletepotential 5 minute bear flag on AAPL and possibly Spy as well.
ReplyDeleteCould we be in c of 5th of ed now. Using tj's ed.
ReplyDelete'possible' but less likely until this morning's SPY low is exceeded lower.
DeleteTJ
SPY 15-min: cash has a higher high. Watch the gap and the fractals.
ReplyDeletehttps://www.tradingview.com/x/HVzZEZ7j/
TJ
ES (5x3) Current update -
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SPY 15-min: as far as I can tell, if the market is trying to make a diagonal upwards, it is pretty much make-or-break time. The previous red (down) fractal should not be taken out as both down waves are > 62% already.
ReplyDeletehttps://www.tradingview.com/x/G11DdOV1/
TJ
..also in this pattern nested (i), (ii), i, ii up works as well. The degrees currently work to the bar. So be aware. Thinking caps on.
DeleteTJ
Yep! I suspect VIX is already telling us which is likely correct!
DeleteSPY/ES 15-min; there is the ES higher high >3,935. So a diagonal may be considered. Diagonal can be ending or leading. A diagonal is only good to ES 3,947.50, and beyond that (without a retrace) a third wave, up, would have to be considered.
DeleteES 3,9947.50 was just exceeded higher; so by measurement - by the rules - we can be in a third wave up. Perhaps iii of (c).
DeleteTJ
..just fyi - in the category of "thinking caps on", IFF the up wave starts down overlapping 3,910 then two ways to get count confusion would be a) with just the triple zigzag, up, or b) if the (c) wave becomes an expanding diagonal. Just be on one's guard.
DeleteTJ
A new post is started for the next day.
ReplyDeleteTJ