Let's say that you are even a raging bull (which I'm not, I'm neutral) expecting a lot more upside. Then there are two ways that there still should be five-waves-down to start. The two most typical cases are below. The first suggests that maybe we are in a triangle consolidation on the ES daily chart.
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| ES Futures - Daily - Two of Three Ending Scenarios |
IF we did not already have the running fourth wave that was previously proposed, and the fifth wave up of minute ⓒ, the triangle shown is a very typical way to nearly conclude a move. The reason for a running triangle would be to consolidate the almost 20 days of up movement in wave iii. This can take some time. However, triangles should consist of relatively clear zigzags that wind around wave iii. So far, the down movement doesn't come close. But the next zigzag should start with a five-wave (A) wave as shown in the left-hand panel.
IF neither of the above two scenarios play out - and let's be clear - the first one of the two scenarios is that completion has already occurred, then the next most likely scenario is the diagonal ending as seen in the right-hand pane.
Yet, this structure, too, must be composed of zigzags - which would also start with a five-wave (A) wave down in order to begin a wave ② within the diagonal, saying that wave ① is already completed. To that end, we showed this chart late in the comments section for the prior post, and it seems to suggest with a lower low there will be five-waves-down.
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| SPY Cash - 15 min Close Only - Current Count |
Note that in the post-market price is already below the Ⓓ wave. Still, a wave five, v, on the above chart would need to be seen and to have some length to it. (Note that the wave degrees in the above chart for now are relative only and are just for illustrating the comparison).
In the hourly futures we suggested counting on, it is possible an expanding diagonal will be made, but we will look for other options, as well.
Have a good rest of the evening and keep an eye out tomorrow.
TraderJoe
Thank Tj.
ReplyDeleteFyi. BTFP ending next week. Let's see March or May mayhem.
https://fred.stlouisfed.org/series/H41RESPPALDKNWW#0
From the last post IF this triangle plays out and the e wave stops in here. (5085ish).
ReplyDeletehttps://imgur.com/4hEPwfj
The width of the triangle would get us back down to the lower corrective channel line and the lower channel line on the 4hr.
Well the fugly count held. I have a hard time believing we to not go down and get some fuel at that 4hr channel.
Deletehttps://imgur.com/8ff36oB
Price over e wave so I think were done with correction. I was wrong on it heading to the lower channel. Nickels in front of a steamroller situation.
DeleteES 1-hr: the correct alternate count was provided, as below. It 'is' three zigzags. The overnight futures did 'two' unexpected things, not one. Things happen. Neutral for whippy conditions.
ReplyDeletehttps://invst.ly/13qlfk
TJ
..and, yes, the second 'x' may be a triangle.
Deletehttps://invst.ly/13qlqo
TJ
That looks the best with alternation within the x waves.
DeleteES 15 min / SPY. Note where the cash market opened.
ReplyDeletehttps://invst.ly/13qrni
I can't honestly say where Ⓩ ended. It may have been a truncation. So, both counts have to be carried until one distinguishes itself. They are 'equivalent' until they are not. I do urge caution, as the market is still very whippy.
TJ
ES 15-min / SPY - "Yuk" ..!! I think given where we are near a high, I also have to add a third completely equivalent count at this point.
ReplyDeletehttps://invst.ly/13qs84
That third addition is blue Ⓐ, Ⓑ for a diagonal. In this case, the blue Ⓒ wave is most likely to exceed today's high, and the prior all time high.
Notice more downward waves.
TJ
ES 15-min: SPY, now way more than a 62% downward retrace. Ugly.
Deletehttps://invst.ly/13qscj
TJ
I have been re-reading EWP to try and get some more insight into diagonal and triangles but the treatment of those structures is quite brief. Ironic considering how ubiquitous they are of late!
ReplyDeleteES 15-min / SPY. The black ④ count is out. It changes to black ⑤ with a truncation. The other counts are still "in" until they are not.
ReplyDeletehttps://invst.ly/13qsix
Like I said, whippy. Good luck all. The current market is a bit of a menace.
TJ
This ED would have to be on the table as well.
ReplyDeletehttps://imgur.com/Q6SPZef
nope, can't have the flat in wave 2 of the expanding E.D.; against the 'rules'. TJ.
DeleteLol! I refuse to do anything but credit spreads in this wild animal! 😊
ReplyDeleteIf I was the market and wanted to make a top nobody saw coming I would use the link ending in J3J. Seems a little suspect when some big names are cashing in and the little guy thinks Nvidia is gonna take their job but the stock is gonna let them retire.
ReplyDeletenope in the first one; can't have a flat in wave iv of the contracting diagonal. Against, the 'rules'. TJ.
ReplyDeleteES 4-hr: I just can't find any basis for taking exception with this count. Wave iii is longer than wave i, wave iv does not overlap (granted by only three ticks - but it is what it is).
ReplyDeletehttps://www.tradingview.com/x/rLWu2UGK/
Tomorrow is the first of the month, and Congress is 'working on' budget resolutions, etc.
TJ
..also, the 4-hr EWO went below the zero line. TJ.
Deleteand see below. TJ.
ReplyDeleteThx for the response. I was surprised we did not get to the lower 4hr trendline so maybe the second one lets us get there. Off for the weekend. Have a great one all and good luck!
ReplyDeleteFrom Seeking Alpha:
ReplyDelete"Cleveland Fed President Loretta Mester said on Thursday that she supports requiring banks to have in place legal agreements and collateral that will allow them to quickly use the Federal Reserve’s discount window in times of stress. That's to make sure that banks are prepared to borrow from the Fed when needed to tide them over during liquidity crunches."
It's almost like they know something lol.
She knows they are all insolvent as she and her comrades blew up their bond portfolio to the tune of 1 T. Soon everyone else will when Powell's bluff on cuts is called at the next auction and he raises a quarter point, lol!
ReplyDeleteA new post is started for the next day.
ReplyDeleteTJ