The ES Weekly chart (Close Only) is below. The main count is shown in black. It could hold. The issue is some stocks (like the Magnificent One, AAPL) could complete a fifth wave up. That's where the alternate comes from.
Prices in the last couple of weeks have been skating on the dashed rising three-touch trend line. If it breaks significantly, is back tested, and fails lower, then a downward count might resume.
From the ES hourly chart, below, one can see the significant whippiness in price behavior.
On Friday, the market did not complete a five-wave-up sequence, but it could in the overnight on Sunday. Whether it does or it doesn't, it could head back to-and/or-through the low in a larger flat wave or next impulse lower. (We also indicated in cash it is possible to consider the upward diagonal as a -3, and not a -5).
Short term, the uncertainty is high. We can easily see the high of the diagonal being taken out and an upward correction continuing as the current upward correction is quite short in time compared to the decline from the late-JUL, early-AUG high.
Still, if the right news comes to the fore (difficulties in China, the banking system, etc.) nothing to the downside will surprise us either.
Have an excellent start to the weekend,
TraderJoe
Just something interesting to note.....if (if) the market rallies back up to a final high early in September, this would mirror the price action in 1929 and 1987. In both of those years, there was a 29 trading day period from the high to a secondary (lower) high, and then the crash waves started. I have some charts of both years so I will be monitoring today's market for evidence of similar price action. Also worth checking out the Puetz crash criteria (around solar/lunar eclipses) which are upcoming in late October. I think something truly dreadful is coming, perhaps tied to yet more worldwide lockdowns and a credit event.
ReplyDeleteInteresting indeed! TJ.
DeleteThe big C!
DeleteFrom the expanding diagonal it looks like an impulse down and a 335 flat.
ReplyDeleteES 30-min: looks like a fifth wave up held within limits. Let's see if a fourth wave is undercut or not. In real-time (chart is delayed 10-min) there is a lower low after the last bar shown.
ReplyDeletehttps://www.tradingview.com/x/HlZSBNGA/
TJ
SPY cash (1-hr); price has breached prior local high, and now prior local low.
ReplyDeletehttps://www.tradingview.com/x/7K55m7Mv/
Looks to be another flat, but it may ultimately point upward. High uncertainty still reigns supreme. Whippy conditions prevail. Caution needed.
TJ
A new post is started for the next day.
ReplyDeleteTJ