Saturday, March 11, 2023

A Chart in the News

I don't do this often, but today I thought I'd just take a look at a chart in the news. Sometimes I look back to see, "if I was counting this at the time - and I wasn't - how close would I have gotten using degree labeling concepts?"


I think this one chart has some important lessons for both the beginning and the experienced wave analyst. For example, notice how the decline has one good impulse in it from the high and then degenerates into miserable chop. How many times will the analyst think they are incorrect about a downward count and that a big correction or up-thrust must occur sometime in early 2022?

And how about that truncation at the high? Is it real? It turns out if you start the diagonal from the wave peak before there - from a wave counting perspective - then the lengths of the waves in the diagonal and relative position of the wave 4 - 1 overlap don't work out. So, maybe those truncations are real, after all.

Oh, and it's a Leading Diagonal, right? Where o' where is that supposed 'deep retrace'? Nowhere. That's where!

Yes, last week's fall was stunning. But price is now down near the bottom of a channel. And just look at what preceded it. Who monitors these bank stocks anyway (from a regulatory standpoint)? Do they even give a whip when the stock has fallen from 750 to let's say 500? Hello, anyone home?

Have an excellent rest of the weekend.

TraderJoe

30 comments:

  1. Momentum for me has always been a good gauge to judge the nature of the decline under consideration so your point in that regard is well taken. What is fascinating about that chart is when you compare waves of similar degree, the strongest down candles do not show up in third waves, but in waves 1 and 5. I suspect there is a reason we are seeing this.The PPT was active to the tune of about 30% of the bid on Friday's plunge!

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  2. Best quote of the weekend. "Everybody loves free markets until they try to do free market things".

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  3. Watching Premier League football (soccer) this week, after the problems with FTX and Silvergate, I note that for the first time - as opposed to many, many, prior weeks - there were no "banner ads" surrounding the pitch for "Crypto" or crypto exchanges. How disingenuous is this? If crypto was such a great vehicle, then why not now? You know why. It's why I will have nothing to do with it.

    Silvergate Bank Article

    TJ

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  4. From CNN: Yellen Rules out Bailout for Silicon Valley Bank

    Treasury's Yellen Decision

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  5. https://www.federalreserve.gov/aboutthefed/boardmeetings/20230313closed.htm

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    Replies
    1. Should be short, don't take long to say "Mark um at par".

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  6. Thats capitalism peps, when you got losses, get them up to the Feds.

    LOL when I hear were moving towards socialism.

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  7. USA is house of cards. banks/wall st takes HUGE risks. When something goes bad, FED and/or taxpayers have to bail them out. zero punishment.

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  8. Daily and weekly 18s near 4k on es, I for one hope they get there by tomorrow or Tuesday....

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    Replies
    1. Likely a "Good-bye Kiss" of 200 day on deck @3940 or thereabouts...

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    2. If they got over it, even better for a fake out

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  9. Here is the large triangle update.

    https://imgur.com/Co8btWo

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    Replies
    1. Looks like the overnight crew went up to clean up some wave 1 stops and then moved on to filling the gap.

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  10. Was it an impulse with a wedge shape? Here is the idea with a look at the triangle.

    https://imgur.com/aVTemqb

    https://imgur.com/RjwEvcL

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  11. The Fed is like somebody trying to manage an addiction. Now you have inflation to high and you are causing credit events. Good luck with this!

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    Replies
    1. How many times have I heard they will tighten until credit events show up. Now you got them with hikes in the pipeline with lags that no one can pin down.

      All reminds me of the analogy of three different pool companies trying to manage the amount of water in the pool.

      The smart guy is probably sitting on the side of the pool with a refreshment just watching.

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  12. ES 4Hr: Good morning all. There is nothing wrong with a down count as long as price remains in a channel, as follows.

    https://www.tradingview.com/x/LS17Q2V7/

    Can things get whippy? They can. (see red ②) But every first wave 'should have' a decent second wave. Price has not yet attained iii = 1.618 x i. It could. If it does, we'll readjust the channel. We just take things step-by-step.

    TJ

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    Replies
    1. Thinking the same, b wave at the bottom.

      https://imgur.com/JWMMQWq

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  13. VIX - Daily - here is another indication traders need to be prepared for significant whippy (volatile) behavior. Where is the VIX, now. It's not 9, baby. Isn't this what a number of commenters here were waiting for ??

    https://www.tradingview.com/x/OUEQO2M7/

    TJ

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    Replies
    1. This level could hold until Fed meeting. Sounds like market expects Fed to hold steady.

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  14. I think somewhere around 3982 is where the net distance of (2) would have to stay under to be less than ii.

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    Replies
    1. Looks reasonable from the chart. I would put a 'wave-counting-stop' above today's R2 at 4,016. TJ.

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  15. SPY 5-min: has met the requirements of an expanding diagonal or an expanding triple zigzag at the 50% level. This argues for monitoring the prior high.

    https://www.tradingview.com/x/nXTPjbce/

    TJ

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    Replies
    1. SPY 5-min: now above upper diagonal trend line. 'Possible' flat, but watch the high.

      https://www.tradingview.com/x/49RYLf5Q/

      TJ

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    2. SPY 5-min: has broken another three-touch trend line lower before exceeding the high and is thus losing some momentum.

      https://www.tradingview.com/x/9kMf9nJQ/

      TJ

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  16. Reminder: tomorrow is CPI report. Some brokers already report raising day-trade margins to exchange minimums. TJ.

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  17. SPY 5-min: the diagonal has been exceeded lower before a new high. It is likely therefore a leading diagonal.

    https://www.tradingview.com/x/jrBSWB8P/

    TJ

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  18. A new post is started for the next day.
    TJ

    ReplyDelete