Friday's hanging-man candle in the futures did get confirmation lower today. U.S. equities as measured by the SPY cash ETF opened with a gap lower, and followed-through. First, a reminder of the weekly count.
Prices fell off of the upper dashed expanding diagonal trend line in an interesting sign. Now on to the plausible daily count.
The count of a (c) = (a) zigzag with an expanding ending diagonal for the the fifth wave, v, of (c) would expect to see prices drop below the start of the diagonal at the 390 level in less time than the diagonal took to form. The Fibonacci ruler shows the (c) = (a) level.
As of yet, price has not dropped below the dashed lower uptrend parallel. It needs to do that, and back-test that line and then fail the back-test with a lower low candle. Again, I am not in love with any particular up count at the moment. This one has some strengths to it in that it would follow degree labeling considerations. If you also called it (y) = (w) I would see no reason to argue.
I would also just add that as of the cash close, the ES futures daily slow stochastic was no longer embedded. This needs to be watched for the next day.
Have a good start to the evening.
TraderJoe
Forgive me if you addressed this previously, but are we assuming the expanding diagonal downward is of the leading variety ( I seem to recall some mention of that being Prechter's view) with a deep retrace to follow its completion?
ReplyDeleteYes, addressed back on Sep 30. See the last paragraph in the link below.
Deletehttps://studyofcycles.blogspot.com/2022/09/just-providing-number.html
TJ
That link didn't work. Reproduced it here without the s in the http:
Deletehttp://studyofcycles.blogspot.com/2022/09/just-providing-number.html
@Tachyon, keep me honest but I think you were asking for guidance on a wave 2 retrace if the expanding diagonal is confirmed/completed. Probably getting ahead of myself but I'm curious about same thing
Delete@TJ The link you posted is talking about the depth of wave 5, not the retrace back to the higher degree 2.
Essentially TJ. Deep retraces are typical with diagonals but since expanding ones are rare, I was uncertain if evidence suggested the same should be expected. If this is indeed the case, completion of C of 5 could take price close to previous ATHs, obviously with tremendous implications for traders.
DeleteBTW, TJ indicated that completion of the possible intermediate 5th wave zig zag of the expanding diagonal "could" be all of primary C. This is critical obviously since once minor C of five below 3335.50 completes, we get a new ATH. IF the minor b of 5 is done, it lasted about 6 weeks, and if the putative current minor c of 5 down completes a primary C, the entire wave would have lasted about 1 year.
DeleteES-30 min: There is some reason for caution here, as a completed expanding diagonal, say a wave i, could be counted on this time-scale.
ReplyDeletehttps://invst.ly/zr0am
And a similar-type thing in cash. For the moment, I consider these as alternate counts, as the wave ((3)) would look a bit odd. Legal, but odd.
https://invst.ly/zr0dm
TJ
Nested 1-2 count in XLE? Watch the acceleration channel
ReplyDeleteGOLD 4-Hr: not sure, but here's a thought, and the invalidation level for it.
ReplyDeletehttps://www.tradingview.com/x/Ejb2QnPj/
TJ
That is really appreciated!!
DeleteWelcome. TJ.
Delete18 ma was support, good to see. Now I know where resistance will be if it breaks.
ReplyDeleteES 30-min: has now crossed below 3,982 allowing for EITHER wave ((3)) in the larger hourly diagonal, or wave ((5)) in the smaller ones. The smaller one is shown with the red counts, above. The larger hourly one was shown yesterday. TJ.
ReplyDeleteSPY 30-min; a wave iii likely reached the 1.618 this morning. This pattern has the 'better look'.
ReplyDeletehttps://www.tradingview.com/x/D5Q1jxhs/
TJ
SPY 4-Hr : First breach of lower parallel trend line on cash. Open gaps also shown.
ReplyDeletehttps://www.tradingview.com/x/TTmEsfK2/
TJ
Seems like some horizontal support at around 3930 ish on ES. Good place for 3 to end and a backtest to begin.
ReplyDeleteThink we need a 4 and 5 yet for c of 3.
DeleteFun to watch gold try an hold that trendline. I think we could get a stab down that would be c of 4 in TJ's diagonal idea.
ReplyDeleteA blue v for gold could also align with some kind of Risk On bounce for other assets.
DeleteSPY 1-Hr: the FED bar low has been exceeded lower. Bulls can't be too happy about that.
ReplyDeletehttps://www.tradingview.com/x/S0zi4Zr1/
TJ
No doubt. All those traders bamboozled by the naked skulduggery of Powell should just about be awakening to the fact...
DeleteSPY bounced at the "fair value gap", could see a corrective move back to $396-398 at a minimum
ReplyDeleteA new post is started for the next day.
ReplyDeleteTJ