Some people are perplexed by degree labeling. Here is how degree labeling helped make a real time judgement call today. If you look at the longest & strongest wave down from this morning's high, one is very, very tempted to call that a third wave. Here is the ES 5-min chart.
The problem was this: today there was no way to count off the top as a diagonal because there were flat waves for the numbered waves which is not allowed. Further, in the wave sequence for wave three, the first sub-wave would have been larger than the original first wave down. This seems to violate degree definitions. Let me illustrate.
Notice how wave ① would have been longer in price than the higher degree wave i which would violate the definition of degree. No, the above chart is incorrect! This is the way the count was resolved - again in real time.
The above chart is correct. It is what allowed me to suggest that the fourth wave location at 38-50% of the incorrect wave three might bust.
Look it over. It's the extended fifth wave count.
Have a good start to the evening and the weekend.
TraderJoe
The peak of the EWO using the 8fold path method corresponds to wave iii of v using the 8fold path method? I'm only used to using it for when the 3rd wave extends.
ReplyDeleteConsider that every expanding diagonal is also a case of x5. We have previously shown the expanding signature of EWO in an expanding diagonal. In all of those cases, the EWO has its largest value in wave 5. There are many, many fewer examples of the impulsive x5 to study, but it stands to reason that the largest wave would also show the greatest momentum. TJ.
DeleteI was thinking the 5 of the diagonal failed are your ii location.
ReplyDeleteThe problem with that is the lower low flat wave labeled ⓑ; if three is the high, and i is the four, then four 'must' be a zigzag, and can not have the flat in it. TJ.
DeleteThis was my thinking on the failed 5th but it is short.
Deletehttps://imgur.com/AbQBnpS
..right. TJ.
DeleteHello is it possible to have your opinion on the Dax. . The Dax 4h chart looks like the ES 4h...It seems that they have taken the same path....Thanks in advance for your time
ReplyDeleteI don't spend a lot of time analyzing Euro indexes because of the lower volume. So, take this analysis with a grain of salt. From a pattern-recognition point of view, the higher high in the DAX allows for this potential ending diagonal count.
Deletehttps://www.tradingview.com/x/jChgLoUG/
Keep two things in mind: 1) this is a 'monthly' chart - things could take quite a while to play out, 2) wave ⑤ in an ending diagonal is allowed to 'fail'. That is it 'might not' eek out a new higher high. Hope this helps.
TJ
Thanks for your time indeed. From the last high, I can count a minor 5 wave sequence on lower time frame: daily/4hr. As far as I know a diagonal's pattern is 5 3 5. The A wave must be in 5 wave sequence. Last question: Can a 4th wave slightly be higher than the 50% fibo level or is invalidated at 61.8 level.
DeleteTechnically, wave ④ only invalidates if it becomes longer than wave ② in price. However, if it gets beyond 81% of wave ② then it begins to lose the "right look" for a contracting diagonal. The trend lines will not seem to contract. Hope it helps. TJ.
DeleteAbsolutely beautiful illustration of real time application of degree labeling principles. I have to admit I was leaning toward the incorrect count! Getting this right a game changer for traders. Thanks for all you do TJ!
ReplyDeleteThx & welcome. TJ.
DeleteHi TJ.
ReplyDeleteHere we are with the lower low on DJI.
Overall I can't find any reason why it can't do the 5th leg up?
especially the 16/6 - 10/7 corrections measure best as a B wave flat? Not a zz?
https://invst.ly/11kpsp
Thanks!
I don't have a problem with this provided your wave (2) is not exceeded lower. But - for more perspective - see the new posting for the next day which is already up on the blog. Thanks for contributing. TJ.
DeleteA new post is started for the next day.
ReplyDeleteTJ