Ignoring Cash ... You Get Equality in Time

As most of you know, I follow the ES futures rigorously - while some Elliott analysts only study cash, and in fact some Elliott analysts (Neely, specifically) have stated at one time or another "not" to follow futures due to erroneous charting results resulting from time premium decay or other phenomenon. We have showed the SPY cash chart at this LINK from the comments of the prior post. But, if we ignore the cash market for a moment, you can see that consideration of the futures shows a Fibonacci relationship in time as follows on the ES 2-Hr chart, below, where the time of b = time of a.

ES Futures - 2 Hr - Equality in Time

Also considered in this manner, the downward wave b is an exact 50% Fibonacci retrace from the high labeled as the a wave. The b wave also counts very well as just a triple-zigzag correction in a channel as corrective waves often form.

Further, when considered in this fashion, there are no degree violations in this count because although wave ((3)), up, is slightly longer in time than wave ((1)) up, it is a wave of the same degree, and its sub-waves are all smaller than the totality of wave ((1)).

There is by no-means (even with these relationships) an all-encompassing reason to lock-in on this count. IF an a-b-c results, it could just be the start of a double zigzag larger minute ((b)) wave, up. It is also possible that the count could be a/i and b/ii. Why is the chart not labeled this way? Well, it is very, very difficult to count cash in an impulsive fashion at the moment. And as of yet there is no evidence of a 1.618 wave upward. If a 1.618 wave results, we will gladly consider the second form of labeling. But not until then.

Further, if only three waves up results, we must then consider a return-trip to the lows to form a possible Flat minute ((b)) wave, up.

In case it is not clear, the primary message of this post is to 1) stay flexible, 2) consider all the options, and 3) consider the current locations of the upper and lower daily Bollinger Bands, particularly when those bands are traveling sideways. I know how all-too-easy it is to get stunned by an intraday reversal. And I know how all-too-easy it is to go ga-ga over momentum in one direction or another. These two emotions are to be avoided at all costs. If you can't curtail these emotions, and some others, then financial markets might not be for you. This is one of the reasons why we posted a wave-counting-stop at 10:19 yesterday in the comments. It is usually a place where trend-line analysis and channel analysis indicate that something is changing. The analyst's job is to find out what. And it is the trader's first job to protect one's account capital, rather than to chase after profit at every moment.

Have an excellent start to the weekend.

TraderJoe