It's still a question but the extent of today's run - without pullback after the cash open - was impressive. The SPY cash index made a higher high. The ES futures came within 1 point! All of this puts into play the last of the Elliott Wave topping patterns - the one that is supposed to be the rarest formation on the charts: the ending expanding diagonal. Below is the hourly chart of the ES futures.
Here you can clearly see the expanding pattern in three-wave sequences. IF the ES futures can get over their prior high - which doesn't seem like much of a feat, then it would better indicate this pattern. And, IF it can get over 4,189.25 level then it would indeed validate the pattern with the lengths of all the waves being minimally correct. Then it is a question of how high and where it stops. This pattern is brutal. It's third wave is 'almost' 1.618 x its first wave. The fourth wave is actually shorter in time than the second wave which is not ideal. Interestingly, this pattern actually invalidated lower in the NQ futures. But we count each index for the stocks it represents, not all indexes together.
Blog reader and contributor BBRider & I have been discussing this one back-and-forth for a few days. I laid out the condition that there had to be a lower low to wave (4) in the ES that held above wave (2), which there was. He had the foresight to recognize the pattern early, and the tenacity to stick to the count. Bravo! Well, so far. Let's hope there are no more real surprises to this pattern as it has gotten testy enough already.
Tomorrow are some financial sector earnings. IF today was an "A" wave up of (5), then there is a very wide playing field for a "B" wave lower. Perhaps this pattern overall will end on Monday or Tuesday of next week. Hard to say. We'll take it step-by-step. The placement of the c label is a placeholder only and does not represent how high that wave can eventually finish.
Have a good start to your evening,
TraderJoe
TJ, Thanks for the words. I think the lower channel line is probably the target for now.
ReplyDeletehttps://imgur.com/7f3g1Dl
Cannot give you enough thanks for all your education going back to the EW trends and charts days!
I second that, your discipline in counting EW waves is truly remarkable. ALL other so called analysts change counts with the wind and put out analysis full of degree violations. Very appreciative of your talent and also the commentary/buzz it creates from readers. I habitually check into the blog multiple times a day.
ReplyDeleteES futures 1-Hr: well the futures just got up through the prior 4,178 high on the morning economic reports, better putting the expanding diagonal into motion. But they have not exceeded the needed 4,189.25 minimal length yet. They certainly could.
ReplyDeleteTJ
Thanks TJ,
ReplyDeleteSurprisingly Banks are still making profits either way where interest rate goes.
https://www.cnbc.com/2023/04/14/jpmorgan-chase-jpm-earnings-1q-2023.html
IF you got 5% interest from the FED and only paid your depositors 0 .04%, you'ld make money too. The article says it's due to an increase in 'net interest income'. TJ.
DeleteVIX Getting close to the green multi year support https://www.tradingview.com/x/T9uZxbcL/
ReplyDeleteES futures 1-Hr: hit 4,189.25 'exactly' probably qualifying the diagonal. Watch out for a possible 'b' wave. TJ.
ReplyDeleteIf ES pukes here I can see a running correction on smaller time frames.
ReplyDeleteAnybody working a 4hr gold contracting diagonal?
ReplyDeleteLooking for a backtest.
DeleteInteresting that the SPX has dropped just over 40 points yet the VIX is sleeping.
ReplyDeleteYeah, what happens when the VIX wakes up?
DeleteMakes me wonder if this isn't some kind of a "b" wave
Delete@MT .. see my post @10:11 am. TJ
DeleteTJ do you have chart of "b" wave? are you thinking ES goes above today's high of 4,189 ?
Delete@Jim: yes, it is 'likely' that ES makes a further high; 'probably' Monday into turn-around Tuesday. As to the chart, a link is below. But because a 'b' wave can be literally 'any three' including a triangle, we must allow four scenarios as shown on the chart.
Deletehttps://www.tradingview.com/x/WtO7yyLw/
Sorry, it's not me. Elliott Wave simply cannot be more specific than that at this time. Let's see if the up wave finishes properly. Since there was today a very nice 62% retrace wave - which could be all or part of the 'b' wave - then the expectation still is that price will again go over the high. But I've been fooled before.
TJ
TJ
ReplyDeleteposting an old weekly chart of yours.
Please let us know if still valid
https://linksharing.samsungcloud.com/71wESR5TdVuT
The chart is delayed. Sell in May and go away.
DeleteNo, see the next day's post. TJ.
DeleteThis market is such a tease
ReplyDeleteBased on how the wave from 4110 to yesterdays high channeled, I would say it was an impulse. We also have not got to the lower channel line going back to 3937. I lean towards another push up.
ReplyDeleteAgreed. Price action in daily has clearly been price consolidation in an uptrend. The start of a possible intermediate degree third wave to the downside will be un-ambiguous. The great Dick Diamond used to say if you have to ask if it is a third wave, it probably isn't!
DeleteA new post is started for the next day.
ReplyDeleteTJ