Today in the SPY 5-min chart we were able to count an expanding diagonal downward in five waves which broke yesterday's low. The market, having made five-waves-lower thus provided Confirmation Step 1 of a third wave lower. The hourly chart of the SPY cash ETF is below.
 |
| SPY Cash - Hourly - Off the High |
Further, the market broke the (i) - x trend line in less time than wave z took to form. That is a good sign for speed. Please note that even though we were able to count an expanding diagonal lower, the market may want to morph it into the contracting diagonal variety on the hourly chart (so that is why we show an alternate location for wave i).
Regardless, to maintain a downtrend, wave ii should not travel above the high of wave (ii).
Because of the wave lengths involved in cash to the z wave high, we do not currently see a diagonal upward in cash (unless it was followed by a flat) so we are holding off on posting an upward alternate at this time.
If the wave (ii) high holds, then we would like to see a 1.618 to 2.618 wave downward to provide Confirmation Step 2, and a lower low than wave (i) to provide Confirmation Step 3. Still, we can't put the cart before the horse. The market is still being very cagey - or at least very whippy. So patience, calm and flexibility are still required.
Have an excellent start to the evening.
TraderJoe
TJ, given Nasdaq e-mini 23/3 high 13031 exceeded 22/3 intermediate 12960 high, would this shift odds to the "contracting diagonal variety" you mentioned?
ReplyDeleteOr alternatively, in S&P Cash, can the move since 1/12 4100 high be part of a developing B-wave triangle (4100/3764/4195/3808 and now in d (completed 4038 or a bit more to around 4100) then e down) to be followed by C up for a deeper correction in px and/or time to the 4818/3491 drop?
In the NQ, since the Oct- Apr retrace is 78.6%, a 'running triangle' or failed double-combination can not be ruled out. This is just a phenomenon of this index having no bank stocks and should not be considered as over-riding other indexes. TJ.
DeleteNice call on the Contracting Diagonal Mark and TJ!
ReplyDeleteInteresting that it appears to have formed on the futures this a.m. and "might" kick start things.
DeleteFutures back-testing lower channel line
ReplyDeletehttps://www.tradingview.com/x/oDCsH9eR/
SPY 1-hour: now also has the lower cash low, making either a 'leading' or 'ending' diagonal possible. Now watch the lengths to be sure they don't get too long for the fifth wave of a contracting diagonal.
ReplyDeletehttps://www.tradingview.com/x/mvS3H4Yq/
TJ
QUESTION: If forming wave "ii", and expecting it to be less in price than wave "i", should we also expect wave "ii" to be less than or equal to wave "i" in time? Thank you
ReplyDelete'Sometimes' when a second wave forms after a diagonal, it is a relatively short-in-time zigzag, and may be less than wave i in time. 'Usually' when wave ii forms after an impulse, it is more equal to wave i, in time, or longer. But, they are 'rules-of-thumb' based on experience (meaning 'observed occurrences in prior waves'). But they are not rules. TJ.
DeleteSPY 1-Hr: closed the opening gap.
ReplyDeletehttps://www.tradingview.com/x/psHLQQDW/
TJ
SPY 5-min price struggling to break thru .382 level from the wave down
ReplyDeletesee below @ 2:09 pm. TJ.
DeleteSPY 5-min: possible diagonal subject to a 395.73 length limitation. 'Might' be an 'a' wave overall.
ReplyDeletehttps://www.tradingview.com/x/sAyQqXaN/
TJ
There's the third new high: watch the length.
Deletehttps://www.tradingview.com/x/2kC2olg0/
TJ
What about an expanding diagonal from this mornings 3937 low?
ReplyDeleteinsufficient waves at this time. TJ.
Deletehttps://imgur.com/TEDMdi3
Delete..not saying it's wrong; just that <3 seems rushed for an expanding pattern. And cash has the lower low to contend with. So, 'possible' in futures, less likely in cash. TJ.
DeleteSPY 5-min: it 'looks' done. Draw the Fibo's and see what happens. Technically, another downward overlap 'might' allow a further higher fifth wave.
ReplyDeletehttps://www.tradingview.com/x/O0iAo9rS/
TJ
Impossibly difficult to trade this but I think next week we get to 3800. Close under weekly 18 likey today.
ReplyDeleteSPY 10-min: this is what it 'looks like', given that the potential 'b' wave was exceptionally shallow and short in time. This is difficult stuff; just don't be mad with me - be mad at the market.
ReplyDeletehttps://www.tradingview.com/x/s7PVfo5f/
TJ
Clearly, the 'c' wave doesn't need to be done yet. TJ.
DeleteCaptain E-Wave's US 10 year bond yield chart (monthly) https://pbs.twimg.com/media/FsKRxuaWIAI_9ue?format=jpg&name=4096x4096
ReplyDeleteTurned down at the mid channel line so far.
ReplyDelete