Today's SPY candle on the daily chart, below, is a Doji. The sell-off occurred as some brokers notified some clients of increased margin requirements before tomorrow's CPI report, and as some people just decided to exit before the big reports.
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| SPY Cash - Daily - Doji |
This candle style is one of indecision, and it occurred on continued reduced volume. The major problem with a candle like this is that - even though it shows some of the Smart Money didn't like the highs, and they made a tail there - it just doesn't show sufficient power to the downside. Price did not fill any candle gaps lower, nor did it break the temporary (dotted) channel, shown, lower. So, there are still ways that Flats, Triangles or Diagonals could resolve upwards, even though there was some overlap on an impulse we were trying to count intraday.
For example, we showed in the comments for the prior post, on the Dow (YM) futures 4-hr chart, that some or all of a diagonal could be in the making.
Price movement after the reports may provide some clues but the above lack of power and speed is the primary reason significant follow-on candles are needed to provide better confirmation a trend change is underway.
For this reason, patience and flexibility remain the requirements of the day.
Have an excellent start to the evening,
TraderJoe
Ending Expanding Diagonal update. Would not be surprised to see us work over to lower trend line in the overnight.
ReplyDeletehttps://imgur.com/HeoqxOn
I should note also that today's high came on a strike of the upper daily Bollinger Band. The band 'might' rise tomorrow. Keep an eye on the embedded slow stochastic, as well.
ReplyDeleteTJ
ET, It looks like your 2w chart isn't logarithmic. Why do you prefer it drawn this way.
ReplyDeleteHigher is possible this week, could have mid month inflows 401k's etc.
You can do a log chart if you like. Generally, I do them when 5 - 10 years involved as there is not much inflation in a lesser period. Elliott said he often did both. To me, the price projection is a 'zone' and not a hard fact. That is, it might 'tail' over it or something. Difficult to be too exacting. TJ
DeleteCore CPI came out a little hot. Pre-market sinking a bit. TJ.
ReplyDeleteED retraced in less time than it took to build.
ReplyDeleteHere is the larger channel with the hit yesterday.
Deletehttps://imgur.com/vmx4rYf
4957
Deleteis better number for horizontal support and lower channel.
DeleteDow (YM) 4-hr futures (and CFD) as far as I can tell the down wave is longer than (ii) which now would end any upward movement in a continued diagonal. And it's still dropping.
ReplyDeletehttps://invst.ly/13g3k-
TJ
My gold count needs modification. Maybe a barrier triangle but they are rare ducks.
ReplyDeleteGold looks very much like a wyckoff top.
DeleteThx for that! I have to read up on this. At first look, it reminds of the Weinstein methodology. Stan, not Harvey!
DeleteYM, ES & SPY are through their local lows. Can go further.
ReplyDeletehttps://www.tradingview.com/x/4aB6stOi/
TJ
ES Daily - prices touches 18-day SMA and daily slow stochastic is no longer embedded. A price rebound to start a second wave up would be interesting. Certainly, the five-waves-down argues for monitoring the high.
ReplyDeletehttps://www.tradingview.com/x/ftZwvXoi/
TJ
Using a 15min to get the large candle in the middle of the range for the eight fold path, I come up with this.
ReplyDeletehttps://imgur.com/jnOl7Re
Thinking one more low for iii and the PPT fire up the computers.
Deletesorry v of 3
DeleteTook them a bit but don't be to hard on them as its been a while and they forgot were the switch was.
DeleteNQ now also has the new intraday low. Took a while. TJ.
ReplyDeleteA new post is started for the next day.
ReplyDeleteTJ