Here is the weekly chart of the ES futures, with the count simplified just to show the major idea. So, for better chart clarity forgive the use of a to represent minute ((a)) or circle-a. The other symbols are correct, and a symbol key is shown in the lower left.
So, is the 5th Extension Diagonal (also known as the 3-3-3-3-3 Expanding Diagonal) a good way to form a Head & Shoulders pattern? That is the question. If we are in Minor wave x5, then it is already longer in time than wave Minor 3, and now it needs to become longer in price, with the minimum shown. So far, volume has been increasing with lower price.
Merry Christmas & Happy Holidays to all,
TraderJoe
Merry Christmas. Thanks for everything you teach.
ReplyDeleteSame to you & welcome. TJ.
DeleteMerry Christmas ET and everyone!
ReplyDeleteAppreciate your work. Merry Christmas.
ReplyDeleteMerry Christmas - I'm grateful that you provide this site/knowledge/feedback! If this exp diagonal plays out, is your "scenario #2" for the big picture count more likely? https://studyofcycles.blogspot.com/2022/01/year-end-review-of-s.html. I see that exp diagonals are positioned in 1st and 5th waves of impulses, A and C waves of zig zags, and C waves in flats.
ReplyDeleteIf it does complete properly, it only 'ups the odds' of it occurring but by no means makes it conclusive. TJ.
DeleteIMO, the last supercycle ended with the 2007-2009 crash and the 'Great Recession'. That mild depression alternated with the Great Depression of the 1930's. The Fed spent a decade after 2009 propping up the economy to avert a deflation. Like it should have done in the 1930's. The current period has been a 'war economy' due to Covid with very heavy monetary and fiscal stimulus. Like the 1940's with the massive WWII fiscal stimulus. The Covid war is now over and the economy is settling back toward normalcy. In the 40's, that took 3 years, 1946 - 49. The stock market sold off sharply at first, then went flat for a couple of years as inflation subsided. In 1949 the great bull market of the 1950's & 60's began.
ReplyDeleteSo, by historical analogy, we have seen Cycle waves I (2009-2018) and II (2018-2020) and are now in Cycle III. So far, we have seen Primary 1 (2020-22) and are in Primary 2 (late 2021 -> ?). If this reading is correct, the next bull market should be a big one, subdividing into multiple smaller bulls.
What's different this time around? We have a higher level of government debt. The bears say that is a house of cards that's bound to unravel. The bulls say that the U S dollar is the base currency of the Free World and that the U S government debt finances much of the world's economy, so it's not worrisome that is historically large. It definitely will be interesting to see how this plays out. My bet is that the debt is not a problem until the end of the current supercycle, which I project to come in the 2080's or 2090's.
Very little evidence for this at this time. TJ.
Delete:>) TWT
DeleteI think gold is in c of 5 on TJ's diagonal count.
ReplyDeleteWaiting on a ES to form a ii.
Thanks for all you do 🙏. Many are expecting a bounce this week, put/ call is quite tame right now. So far the 18 ma on the week is holding back price....
ReplyDeleteThanks for the tenacious work you do day in and day out. Been following your work for years always a pleasure. Season's greetings to you and your family.
ReplyDeleteThanks ski, the best to you & your family, as well! TJ.
DeleteA new post is started for the next day.
ReplyDeleteTJ