So far yesterday's ES outside-day-down is acting as a continuation pattern. Monday still needs to be watched. Prices today pierced down through the 18-day SMA, and then - as we wrote in the comments - it stalled there for most of the afternoon.
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| ES Futures - Daily - Back to 18-day SMA |
As of the cash close price was still over the 18-day SMA, but we could only count an ⓐ-ⓑ-ⓒ up in the cash market after the low. That is not very bullish at this time as the market would have a lot of work to do yet (say, to make an upward diagonal out of it).
Meanwhile, the daily slow stochastic is still in over-bought territory and it is not trying to embed (the readings are in the high 70's only). The daily Bollinger Bands are narrowing in; the 200-day SMA is below. With the Bollinger Bands squeezing in, it could later result in a substantial impulse move.
I would begin to watch to see if this recent pattern of lower high days continues. Sometimes the bigger moves in the market consist of a pattern of bars where - for day after day - higher highs are not made. The opposite was certainly true during the daily up trends.
But while the Jury is still out, it sure seems to be taking its time in Deliberations (meaning it's possible any down move is proceeding as a diagonal only). Time will tell.
Have an excellent start to the evening and the weekend.
TraderJoe
Thanks for the word of caution on gold. Also to note, if the recent bottom was the e wave of a triangle, I cant come up with a good idea of a wave it is coming back into for a correction. I think that would have to be down around 1700.
ReplyDeleteSo, I'm not saying this is correct, but in this medium-term analysis I decided to do five things: 1) use the up channel for a wave Primary Ⓐ, 2) suggest that Primary Ⓐ failed by a skosh. Sometimes "A" waves do that, 3) look at the Fibo extensions on the cycle-a wave (lower left) and recognize that 1.236 has not even been hit yet. It would be possible to hit 1.382, 1.50 or 1.62. But that has not happened yet. 4) Suggest that 'maybe' Primary Ⓑ is going down to the previous Minor 4th wave of Intermediate (3) of Primary Ⓐ since Intermediate (A) down stopped at Intermediate (4) of Primary Ⓐ, up. This would be as a Flat wave since equal wave highs were met/exceeded slightly, and this might coincide with an asset bubble decline. 5) Maintain the very best degree labeling I could throughout.
Deletehttps://www.tradingview.com/x/Yrs1xR4G/
I could be wrong, but I think Elliott would say a wave as big as a Cycle b wave needs to have a 'clear' three-waves-up or else it needs to be a triangle. Regardless, you won't find this analysis elsewhere on the web.
TJ
Thanks so much for the analysis. Goes to your idea of the fourth wave conundrum at all degrees. We are in a large 4 so many options.
DeleteTruly fascinating analysis..Could it be that EW is indicating a somewhat different near+term future than forecast by all the PM bulls??!!
ReplyDeleteUntil Friday, there weren't any gold bulls left. Now there are plenty.
DeleteIf we crash hard, gold could drop hard, like in 2007-08, but it had a good run thereafter. This time, bonds are no longer a safe haven so gold will do well, although the gold investors mostly just buy bank credit gold, as opposed to physical.
Has anyone noticed DJIA has stubbornly refused to join the other major indices in taking out last Thursday's lows. Rare to see this kind of stark inter-index divergence but I noticed similar price action a few months back. Traders gotta love this!
ReplyDeletehttps://imgur.com/vhjZvJu
ReplyDeleteHere is that smaller triangle idea. I remember counting the triangle in the middle. C looks to me to be the complex wave so D and E would be simple ZZ.
The only thing I don't like is it did not come back into the wave it is correcting around 1700 but is kind of a running barrier triangle type thingy which maybe is not conducive to getting back into the last wave. The A wave is short but that was in the middle of covid.
I don't think its going to be denied the next time it gets up to the horizontal resistance.
It would be x in a wxy to get to B in TJ's larger count.
DeleteES looks to me to be in a corrective channel and not sure its over yet since the decline looks as ugly as the rest of it.
ReplyDeletehttps://imgur.com/A0O3P2K
wxy are probably more appropriate labels on the chart.
A new post is started for the next day.
ReplyDeleteTJ