Any number of calls went out on social media this week for "The Top". An analysis below (and my analysis from Friday) shows that a local top is certainly possible. My Elliott Wave count currently has this prior wave up as ⓒ wave of a b wave, as shown on the ES daily chart below.
But first we must note where the current daily parallel is. Price has not even had enough downward movement to get the EMA-13 to cross under the EMA-34. Next, we note if an impulse up is being counted, then certainly wave (iv) could take as much time as its companion wave (ii) did. It is nowhere near there yet, being allowed 26 days - if not longer - because, after all, it could be a fourth wave.
Next, we note based on The Fourth Wave Conundrum there are still ways price could go over the top again. For example, a triangle could form for a fourth wave meaning the low in wave (iv) has already occurred. And certainly, while not a lot of evidence exists for it yet, an ending diagonal could form. There could be only the first wave or the third wave of such a diagonal with the current three waves up. And that might mean price can go over the top again.
Still, the most common form of correction is a flat wave back down to the parallel. And while a move from say 4550 to 4300-4350 might seem like devastation, and a good move to be aware of, it just might not spell the end of the move yet from a timing perspective.
Be careful. Be patient, calm and flexible, and have a good start to the week,
TraderJoe
Meanwhile, here is the open in the SPY. We are watching the prior high.
ReplyDeletehttps://www.tradingview.com/x/8lXzVqqG/
If price goes over the high today or tomorrow, then the diagonal was likely 'ending' and may have been the end of a smaller degree fourth wave. Care is needed. This is the trickiest part.
TJ
fyi only : SPY 5-min: now a 78.6% 'deep retrace' at minimum on SPY after diagonal.
ReplyDeletehttps://www.tradingview.com/x/z37yXf3D/
TJ
New highs (for the move since late June) for $INDU, $ SML, IWM.
ReplyDeleteAs per the comment at 09:44 am, the ES did go over the prior high. The diagonal was ending and not leading. The diagonal appears to be a further extension of a smaller degree fourth wave within wave ⓒ.
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ES 1-Hr: also countable like this to the Ⓒ wave. It was a possibility like this that led me to conclude, we could go higher before lower. This was the correct conclusion, even though the YouTubers and some professionals concluded "the top was in". But no matter ..
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Everyone seems to have gone to sleep. Fewer and fewer are reading the blog. Fewer and fewer are contributing to it. The wave counting is difficult. Few seem to want to sharpen their skills. Most seem content to be 'spoon-fed'. What happens when that ends? And it will at some point.
TJ
Tj..it is very difficult to understand EW in full perspective and time( long, medium and short term). You have obtained a count sense at a level which very less people can get. That is also experience.
DeleteThe market is quite a challenge even for skilled analysts, and even more so for those learning so it is easy to become discouraged. I find it particularly fascinating how what used to be bearish price action can now be reliably expected to be bear traps. Really amazing. The character of the market imo has changed the last few years and someone has observed that during major topping processes many novice traders conclude that T.A no longer works. As the man says, patience and flexibility required in this environment. Divergences and a divorce from fundamental economic reality are by definition temporary.
ReplyDeleteI have been waiting for this time frame. Will it matter over the next 5-10 trading days the we are hitting high-low-high equality and in the price range of the March high of last year. To me, this whole up phase has felt corrective I look at this and see overlaps/squggles that frustrate. https://www.tradingview.com/x/Lva20X9w/
ReplyDeleteLooks to me (on the daily study for SPY) like we are running up the upper BB. Wave iv was a triangle with a rising base. We have now broken out upwards, so are in wave v. Wave ii was a flat, so I don't think wave iv (was/will be) a flat. CPI at 3% was very comforting to the bulls. Mr. Market likes disinflation! Selloffs like last Friday are being bought aggressively.
ReplyDeletehttps://schrts.co/vCWQSPqj
DeleteDJIA roaring to new highs in the face of an NDX opening gap down a most interesting inter-market divergence. Who follows whom...?
ReplyDeleteThe AI theme is pretty well played out ex NVDA, AVGO and SMCI. Market is starting to look toward a cyclical recovery and falling interest rates. Take a look at a crappy company like CVNA. Plus there's often a lot of short interest in such names, so hedge funds may be sticking it to them.
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SPY 15-min: as stated earlier there was insufficient evidence for a potential diagonal. And now, wave-counters?
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TJ
So far so good. Five higher high than three and shorter...
DeleteThe last few ones I was able to count as qualifying had what appeared to be a convincing wedge breach only to see price sprint higher, lol! Tricksy Mr. Market!
ReplyDeleteDJIA counts differently. Potential abc 4th has identical lows for a an c but b appears just under 90% on daily.
ReplyDeleteSPY 15-min: so there is now a max high for a smaller diagonal in this configuration. It is 453.28.
ReplyDeletehttps://www.tradingview.com/x/1XYu2Zgv/
Beyond that and a larger diagonal configuration would have to pertain, with the high as a new third wave.
TJ
A new post is started for the next day.
ReplyDeleteTJ