A lower daily low than Monday was not made today (with about 30-min to go until the futures close), so there is likely a new down (red) fractal at Monday's low.
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Yesterday, we concluded wave minuet (i) was likely completed to the down side as a contracting diagonal. It is likely that wave (ii) is underway. Remember, wave (i) took about 19 daily candles to complete. So, in terms of time, wave (ii) could take additional time. The Bollinger Bands are just beginning to narrow in. The daily bias is still down, the daily slow stochastic is still in over-sold territory, and the lower Bollinger Band was hit today, with price rebounding higher off of it.
Kindly remember that while wave (ii) could be a zigzag or multiple zigzag it could also become a Flat wave. So far, it has traversed 38.2% of the decline. Based on where the upper daily band is now I don't see any reason why wave (ii) could not become 50 - 62% or more. There could be a lot of whippy-ness here. There could be a "battle-for-the-line-in-the-sand", etc. So just be flexible, patient and calm.
Have an excellent start to your evening.
TraderJoe
Remember, wave (i) took about 19 daily candles to complete. So, in terms of time, wave (ii) could take additional time.
ReplyDeletePlease clarify ... More than the 19 daily candles in wave i ? Or more than the 2 candles so far? And a related question ... is there a rule of thumb for the length of corrective waves vs their predecessor motive waves? I.e. 2 vs 1 and 4 vs 3.
Second waves are 'often' between 62% and 200% of the time of their first waves, with exceptions in either direction. GOLD at the 1999 bottom had a second wave that last 400% of the time of its first wave. TJ.
DeleteThank you Joe. Based on open interest in options, I see very possible for the S&P to be around 4000, on Friday expiration day. Obviously, this is not a rule, just a thought.
ReplyDeleteIs there any guidance around retraces in third waves? Granted, this is presumably the first wave of a third wave. But, for example, are retrace waves in third waves generally shorter in time and price than in non-third waves?
ReplyDeleteI'll note too that at a current value of 26 the vix has not (yet) backed off in a way that I would interpret as suggesting a deep retrace at this time.
DeleteRegarding retraces in third waves: yes. According to degree labeling definitions the retrace waves should be smaller than their prior higher degree wave. So, for example, if you had Minor 1, and Minor 2, then within Minor 3 minute ((i)) should be smaller in price and time than the prior higher degree wave in the same direction: minute ((i)) should be shorter in price and time than Minor 1. And minute ((ii)) in Minor 3 should be shorter in price and time than Minor 2. Otherwise, the definition of degrees is contradictory.
DeleteTJ
Thanks Tj,
ReplyDelete4100 target may avoid 18bsnd 100 sma crossover. When was the last crossover in daily es?
Could we be working on a contracting diagonal from the 3839 low? We would be in a of 3 this evening.
ReplyDeletehttps://imgur.com/T0397YK
DeleteIt's a better probsbility, if >3 makes a higher high. Right now the 'b' wave (downward) of a flat is 'also' a probability. And your A needs to move one crest to the right, and the B one trough to the right. TJ.
DeleteAs to the larger diagonal down, I have concerns that the 2 and 3 look like impulses and with the right number of candles, the EWO is not supportive.
ReplyDeletelooking forward to embedding bearish like the rut
ReplyDeleteThis slop reminds me of the end of December.
ReplyDeleteES 1-Hr: there's the higher high which allows a diagonal possibility. It also allows (because it is) a double-zigzag, and could develop into a triple zigzag if it wants more 'time'. TJ.
ReplyDeleteIn the process, price has tagged the 18-day SMA, and exceeded it a bit. TJ.
DeleteES 1-Hr: Two points away from contracting diagonal invalidation. Still OK for the moment.
ReplyDeletehttps://www.tradingview.com/x/WyUIl7Kc/
TJ
Also, on the ES 30-min wave-counting screen, there are five consecutive candle closes outside of the upper band. Odds shrinking to 1 - 2% of another close outside the band. Not impossible, just low odds. TJ.
DeleteES 30-min: candles closes inside band, resetting the number of consecutive closes. TJ.
Deleteis complex corrections allowed to be counted like this? https://www.tradingview.com/chart/SPX500/ryuh1rYE-complex-idea-for-sp500/
ReplyDeleteNo. If anything the pattern would be an a-b-c-d-e running triangle subject to certain length limits. TJ.
DeleteAs far as I can tell the contracting diagonal invalidated, leaving us with just two zigzags up at the moment.
ReplyDeletehttps://www.tradingview.com/x/zHGSOr96/
TJ
Comparing the futures to the SPX index and SPY, the index and SPY are just shy of invalidation.
DeleteTriangle update
ReplyDeletehttps://imgur.com/39CGu1l
So, I'm having a problem getting to that d wave in the triangle, because there is not yet a leading diagonal or impulse for an sub-wave (a) of d. Since an impulse hasn't formed, that only leaves an expanding diagonal (a) wave from here because the middle wave of the pattern is longer in the hourly futures. And those expanding diagonals - while certainly possible - are supposed to be quite rare except at very small time-scales (5 min, 15 min). TJ.
DeleteTJ, I am wondering if your (C) in gold may be starting off with an expanding diagonal.
ReplyDeleteGold (and BTC) are doing their stock bear market thing. Get out of risky banks into safe haven assets. (Altho, I agree w ET that BTC is not a safe haven asset.) Gold pulled back during Jan-Feb when stocks were doing well. A 'B' correction. Now into their 'C' wave up. A 40% retrace on BTC would put it around $35K. Could set up some fantastic shorts ... COIN, MARA, etc.
Delete@BBR - a new update has been published on GOLD. It is now on line. TJ
DeleteA new post is started for the next day. It is an Update on Gold.
ReplyDeleteTJ