With now about 107 candles on the ES 4-Hr chart for the wave of interest the benefits of The Eight-Fold Path Methodology should become pretty apparent (see the Featured Post in the upper right of the main blog page if you are unfamiliar with this method).
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| ES Futures - 4 Hr - Channel Count |
Wave iii downward was a 1.618 wave. I dreaded when that happened because the risk of overlap rises with such a mild extension. Blog readers will recognize that we were expecting a fourth wave, likely as a Flat, because the second wave is likely a failed double zigzag. And so, we have that: alternation. Further, the Elliott Wave Oscillator crept above the zero line as is often expected in a fourth wave. Too, the upper parallel trend line was pushed out a bit today but is not significantly cutting off the bars on the low side. This is as expected. This much is terrific.
The only issue is this. If an impulse is not going to develop, then this is the location where the failure occurs from. If the market doesn't want to make that clean fourth and fifth wave, it won't. And it'll leave a mess instead of an impulse count.
There are relatively few ES points until we know - only about 8 points to the upside. So, we'll soon find out. The alternative is just an a, b, c down with a messy triangle after the current wave iii location.
I have relabeled the fourth wave as Ⓦ-Ⓧ-Ⓨ because of the internal count from the Ⓧ wave. It appears to be three waves in both the Dow and the ES futures. Here is the Dow.
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| YM (Dow) Futures - 15 Minute - Channel Count |
It is very hard to count the expanding diagonal in the Dow any other way. And you can note a crisp c = a Fibonacci relationship as things currently stand. In the ES futures it measures as a 1.272 relationship, again as things closed.
On the subject of Fibonacci, the Ⓨ wave = 1.618 x Ⓦ, when added to the Ⓧ. So, all these things are in place between a 38 - 50% retrace of wave iii. And now we wait to see if the market will do its thing. Either way, we're prepared with the needed information.
Have an excellent start to the weekend.
TraderJoe
TJ - could you comment on how to tweak the 8-fold path method for 1st and 5th wave extensions?
ReplyDeletex1 - EWO likely peaks on iii of 1; diverges on iii of 3, and again on iii of 5.
Deletex5 - EWO likely peaks on iii of 5; diverges on v of 5.
TJ
Thanks for the update TJ, the w, x, y, labeling makes sense based on wave 2 and 4 alternation expectations.
ReplyDeleteWhy w-x-y not a-b-c?
DeleteYou can consider it as a-b-c in the ES; the Dow looks different, had a different bottom time, etc. TJ.
DeleteNoticed the apparently different bottom time in DJIA which Is why I was expecting an SPX expanded flat. Proportions now not so good for that pattern and the combination does appear better imo...
Deletethanks TJ. i'm leaning bearish for a variety of reasons (most rate hikes in short time in USA history, high debt, deglobalization and one of the most overpriced stock market in history). With all that said, it just seems market does not want to go lower but go up (Pavlov's dog was trained to buy every dip in last 12 years) However, I'm kinda throwing in the towel as downtrend as it seems to trickle down slowly but impulse higher. last 8 hours was a rip your face off rally. we'll see how monday/tuesday goes.
ReplyDeleteWelcome. If you remove the colors of candles, the distractions of channels, etc., one can see just how many times we have been here before.
Deletehttps://www.tradingview.com/x/PEtLGOJG/
A key feature of bear markets is 'sharp rallies'. Now the opposite is not true. 'Sharp rallies' do not guarantee a bear market. But, rather, if there is a bear market it will likely also come with sharp rallies. Nothing I can do about it.
Also, you notice I don't feel the need to constantly judge, 'feeling bullish' or 'feeling bearish'. I just abide by the decision of the 18-day EMA which provides either upside or downside 'bias'. That lets me concentrate on whether I want to trade or not. 'Trading' during some market conditions (i.e. FOMC meetings, payroll reports, etc.) is not always the best decision. Hope this helps.
TJ
C waves are usually very fast in either direction and get misinterpreted as impulse waves. Look at oil on Friday morning, typical C wave which gets reversed immediately once shorts pile in. My guess is we are in C of a B wave with another move down into April. A few days higher would be lovely.
DeleteThanks TJ. thank you for the chart but the 4th red arrow(from the right) is signifying what? are the red arrow demarcation 18 sma or some other specification ?
DeleteManu, just showing the spikes up previously that were equivalent to or larger than the Thursday/Friday rise this past week, and yet, they have lower lows after them. That is all. TJ.
Deletehttps://imgur.com/a/WYo9hkP
ReplyDeletePic 1: Has anyone been watching the long-term VIX trend line?
Pic 2: VIX and SPY zoomed in on daily with long-term trend line
Pic 3: My attempt at the Eight-Fold Path Method on DIA. Is this far off? Degree labelling?
I knew this was going to come up. I'm pretty sure that the only way to avoid the degree violations off of the top in the Dow (your first claimed subwave is larger than the claimed prior higher degree wave) is to consider the Dow futures and this expanding leading diagonal.
Deletehttps://www.tradingview.com/x/ahKViLVs/
So, while I'll use the ETF's after the market opens to provide some real-time wave analysis, the analysis of time & price for degree purposes must always go back to the futures. They show the after-hours waves clearly and how long it took to make them, and they show price excursions the cash market just doesn't make.
TJ
SPY 15-min: short-term, the "what! me worry??" wave. Price has been tracking the 10-EMA. Price distance from the 'anchored VWAP from the low' getting near extremes. Volume divergence. 1st RSI divergence.
ReplyDeletehttps://www.tradingview.com/x/XsINAr3E/
We'll deal with the count for tomorrow's post.
TJ
SPY 15-min: there is now downward overlap in both SPY and ES futures. 'Maybe' an ending-diagonal can rescue it. Maybe not. Otherwise, there is yet another truncation in both cash and futures.
ReplyDeletehttps://www.tradingview.com/x/4cc9cwmd/
TJ
HYG daily chart count - https://pbs.twimg.com/media/FqjdahBWIAEngBC?format=jpg&name=large
ReplyDeleteDaily shooting star afoot...?
ReplyDeleteinteresting. Will spx close above or below 18dma at 4046
DeleteSPY 15-min: cash gap filled. TJ.
ReplyDeleteA new post is started for the next day.
ReplyDeleteTJ