Yesterday, we clearly warned that price was four consecutive days closing below the lower daily Bollinger Band. We even clearly titled the post, "Day Four". Today, in a whippy day, we probably closed inside the band (as this is written, there is about 20-minutes of futures trading yet). Here is the ES daily chart as of this time.
After the daily slow stochastic was over-sold, only, and not embedded, price made an outside reversal bar up. And there would not be much to speak about immediately to the downside unless the low of today's bar is taken out lower in the next two trading sessions.
A day like today is what was anticipated IF the longer-range triangle scenario, posted on March 29th were to come to pass (see LINK here).
So, it is pretty clear we have only three-waves down off the high. The speed of the move and depth of the move indicates it could still be the Minor A wave - but of a triangle OR, it is just three-waves down of a downward diagonal.
So let me be clear about these two scenarios:
- The only way down from here is by diagonal.
- The ways UP could be by impulse, diagonal or triangle.
So, it's a mess-and-a-half but as an Elliott analyst one has to keep the larger potential patterns in mind while one is counting locally.
The problem at present is that the market is almost wholly captive to the news. That often results in triangle patterns and decreased trading volumes. But being captive to the news is exactly the way the Smart Money wants it. That is because they own the news-reading algorithms that can take instantaneous advantage of the news. How easy is to write a computer program that says, essentially, if you see the words "Tariff postponed", "Tariff delayed", "China Tariff reduced", etc. in a news story, then BUY.
And because the Smart Money is involved, it would not surprise me at all if the news stories were being coordinated so that the appropriate people who are responsible for making these stories get their commensurate kickbacks. This is America, after all, home to some of the greatest corruption on the planet. And in every situation where large sums are involved, there almost inevitably follow the news stories of who was on the take. We shall see if history rhymes again.
Have an excellent start to the evening,
TraderJoe
https://www.tradingview.com/x/SYwMPykM/
ReplyDeleteOr one can lable above 13 as abc..depending on your view
DeleteI see you are trying to be "Quick-Draw-McGraw". Pardon my brashness but there are three answers to the puzzle, and yours is the least proportionate at this time although still valid for now. The other answers are: Your ⓘ is actually ⓐ, as an expanding diagonal. And, your ⓑ is actually (iv) of the prior wave, with the bottom today as (v) of ⓒ of a truncation low of A, overall. That would make today most or all of a new ⓐ/ⓘ, up, which may not be complete yet.
DeleteTJ
I don't think the overlap miss by a point or 2 in cash was a coincidence.https://www.tradingview.com/x/tnTRu1Og/
DeleteAnd a simple trend line https://www.tradingview.com/x/Kuw1i02G/
DeleteSpot on TJ, as regards the corruption.
ReplyDeleteSomeone bought spy otm options 2 minutes before trumps tweet, converted 1.5 million to 50 million in few minutes
DeleteYep. That's what I mean. TJ.
DeleteTJ, great summary of the options above. Thanks.
ReplyDeletePlease critique. I'm watching for potential diagonal (?) on GC gold*. Degree of labels are for illustrative purposes.
ReplyDeletehttps://i.postimg.cc/HLXZ0v5R/IMG-20250409-185206.jpg
*I do not like how 'a' of (iii) is below the trend line. I don't like how (iv) made the 78.6% retrace but (ii) only to about 70%. I especially don't like that I am assuming the top is in in this hypothetical, so the diagonal has yet to prove itself. Price action is not even close to breaching the trend line from Oct '23 low, and really, a new local high (or low) could be only one presidential sneeze away.
You're not doing anything wrong, per se. You just need to realize that an expanding diagonal is somewhat of a 'low-probability' pattern. I can't help that, but all triple zigzags are lower in probability as they are the maximum in complexity. So, if it invalidates, just recognize there were two zigzags down.
Deletehttps://www.tradingview.com/x/X3HqnAqv/
This is 'the reason' that you can't 'call' a diagonal or a triangle until all five legs have formed. One might 'wish' the pattern were so. The market will have the final word.
TJ
Also, consider this possibility: that the diagonal happened and completed 'earlier' because there 'looks like' five waves up to (c) = 2 x (a), as below.
Deletehttps://invst.ly/19z4mf
TJ
I did actually consider that, but your (v) being just slightly shorter in time than (iii) gave me pause, hence where I placed my (iii). That whippiness and ceiling on Apr 2-3 threw me for a loop.
DeleteThanks TJ. Why can't recent SPX at 4835 (Es 4832) be considered as (4) and now moving up to complete(5) than a triangle as per March 29th post? I do understand wave (2), down, was a simple zigzag and the principle of alternation say that it is sideways triangle or flat but why can't it be impluse? because w(2) was zigzag?
ReplyDeleteI didn't say it couldn't. In fact, in my summary, above, item #2 says it 'could' impulse. But, you also have to consider 'time' and 'alternation'. It is far more likely for a (4)th wave to take more 'time' than its second wave (2). In fact, Neely often indicates that wave (4)'s 'take more time' than their wave (2)'s and sometimes more time than their wave (3)'s. This is the most usual case. So, it has the best odds for (4) to be longer than (2) in time, and maybe (3). In terms of alternation, if wave (2) wave simple, then wave (4) is 'usually' complex. Not always, but 'usually'. And, if not, then one looks for a diagonal (5).
DeleteTJ
You said:
ReplyDeleteA day like today is what was anticipated IF the longer-range triangle scenario, posted on March 29th were to come to pass.
We used to have the Greenspan put, when the SPX was down about 20% ("bear market territory"). But the Fed is a committee, an interest rate follower, not a decisive leader, which apparently frustrates Trump. So now it looks like we have the 'Trump put'.
When you raise tariffs, your currency is supposed to go up and your interest rates down. But the exact opposite happened over the last four weeks. Other countries bought gold with dollars and/or sold T-Bonds. Not a great scenario when you need to roll over $7T of T-bonds in 2025. So, there was an emergency -- the T-Bond auction today. Trump apparently decided this morning that he needed to back off on tariffs immediately.
But, he is still a tariff guy. So he'll allow the market to run to the upside for a while, then he'll start pushing his tariff framework again, eventually the market will decline and, when it gets too hot in the kitchen, he'll back off again. A perfect fundamental rationale for a triangle in the market per your alternate model.
So, for me at least, your alternate model has increasing credibility. And, if today's bottom holds, we could re-frame the 'A' sub-waves as a-b-c which fits the triangle scenario.
Interesting times.
There are rumors that the unexpected rise in T-Bond interest rates collapsed a large, highly leveraged Japanese hedge fund Tuesday night (New York time) in Tokyo. That triggered emergency meetings at the BOJ and later at the ECB. Interest rates spiked on UK Gilts. Looks like there are serious, latent liquidity issues in the bond market. Trump was likely informed early Wednesday morning. Then he posted on Truth Social to his followers around 9:30 am. that it was "time to buy". So, the change in tariff policy at 1:30 pm may well have been a panic move. The QQQ firmed up Tuesday evening and crept higher early Wed morning, well before the tariff announcement. That suggests that the Fed PPT was already intervening in the markets late Tuesday.
DeleteThe more I reflect on the above events, I recall that the Fed is empowered to stabilize markets by a Reagan Presidential Directive after the crash of 1987. A Plunge Protection Team (PPT) was established at the NYC Fed to effect this stabilization., So the PPT does not need for the Fed as a whole to act if they see imminent danger in the markets. So, no doubt they have been on the case since the meltdown last Thursday and Friday. So Trump was likely informed over the weekend that a stabilization attempt was needed. And that backing off on some of the tariff implementations would be helpful if coordinated with the PPT. And it would make Trump look good, that he has the power to move markets significantly (which he doesn't). This move was likely coordinated with the ECB and the BOJ and the big NYC banks. If this theory is correct, the confirmation would be a big a-b-c wave up (constituting the 'A' wave of TJ's 'A' to 'B' triangle segment).
Deleteif this is b wave up for triangle maybe it goes up for 3 or 2 months before the next tariff deadline...
ReplyDeleteYes, that's what I'm thinking. But I'm starting to worry about liquidity issues and black swan events. Things could get out of hand. Even with the tariff rollbacks, GS says the effective rate has only been reduced from 27% to 24% because of the high rate on China. Still, I expect the PPT will push hard for up to a month.
DeleteWhy did apple jump. Lol
DeleteThese moves happened in 2008. That was no triangle.
DeleteGood question! It jumped because the PPT uses SPX and NX futures to juice the market. They don’t deal with individual stocks. This may also be a tell that the NYC Fed co-ordinated with Trump’s tweet. If there were just the tweet, many stocks would have rallied, but AAPL very well could have tanked.
DeleteAAPL is a tempting short, but if the PPT continues to intervene, it will continue to get support.
This is all high comedy. If you think that tariffs had anything in the world to do with a bloated, over-leveraged, over-valued caricature of a market violently undergoing mean reversion, then naturally you would think that a Trump tweet could magically nullify the afore-mentioned market ills. So easy to fail to distinguish signal from noise. Lol!
ReplyDeleteAgreed. But it’s not smart to fight the Fed in the short term.
DeleteJust a note to the larger channel.
ReplyDeletehttps://imgur.com/LSKmOAv
GOLD (GC) 4-hr: one-way or the other back to the underside of the 4-hr channel and back to horizontal resistance. And, hourly, might be forming / have formed a contracting diagonal, or alternatively a 'b' wave. You should try drawing that one out.
ReplyDeletehttps://www.tradingview.com/x/h6m08AZ1/
TJ
Corruption (Insider Trading) confirmed in broad daylight. It has been 'confirmed' that POTUS posted to his followers (not the general news media) to buy yesterday.
ReplyDeleteTrump Social Priior Notification Confirmed
TJ
Insanity = Seeing the same behavior 78 years in a row and expecting this time will be different.
DeleteSomething similar happened in Trump's first term, around Dec 24, 2018. And the Fed intervened. And the market rallied strongly into 2019.
DeleteConsider the source.
DeleteIn his last term, he kept tweeting to bring markets up then Twitter now X blocked him and he still doesn't trust X so tweets from TRUTH social:)
DeleteThis still holds with a flat for ii.
ReplyDeletehttps://imgur.com/uKPIGne
Blow off top possibility would seem elevated.
DeleteHere's that diagonal in GOLD. Now at 1.618.
Deletehttps://www.tradingview.com/x/mVdj1nBe/
TJ
GOLD (GC Futures) 4 Hr - now within 90% of the high. B wave of Flat possible. Next impulse possible.
ReplyDeletehttps://www.tradingview.com/x/HxA6SPeH/
TJ
SPY 15-min: all sorts of overlap, and back to mid-line of original channel. No man's land. Needs another tweet.
ReplyDeletehttps://www.tradingview.com/x/rfBiHFQQ/
TJ
,🤣🤣🤣🤣
DeletePossible ES ED
ReplyDeletehttps://imgur.com/SKGB2PH
SPX at real risk of hitting a circuit breaker today imho.
ReplyDeleteLooking more like a b wave of triangle up..
ReplyDeleteYesterday would be a of B today b of B...
DeleteSPY 5-min: does have a valid upward diagonal, and now a break of the lower diagonal trend line.
ReplyDeletehttps://www.tradingview.com/x/yXIkUglX/
TJ
TJ, when you use parallel lines to help define a correction, do you start from 'zero' or something else?
ReplyDelete"draw from the start of A to the end of B, with a parallel on the end of A." TJ.
DeleteGot it, thanks.
DeleteSPY 5-min: now a 50% retrace. Can go further if it wants.
ReplyDeletehttps://www.tradingview.com/x/xNIifbmc/
TJ
GC gold nearing 4.236 extension of wave 1 move off 2970.4 low on 30 min chart. EWO shows subwave 3 of wave 3 may have completed, so wave 4 is likely underway. Wave 5 would presumably take out 4.236 extension at $3269.2 given gold's propensity for blowoff tops, but I will watch for truncation too.
ReplyDeleteWas just measuring. Very good.
Deletehttps://www.tradingview.com/x/r12Xu5M8/
TJ
It's amazing on cash the difference between open and close is less than 20 points. Futures did abt 400 points
ReplyDeleteThis comment has been removed by the author.
DeleteGOLD (GC Futures) - Gold is currently above the upper daily Bollinger Band. And on the 30-min wave counting screen was just above its upper intraday band.
ReplyDeletehttps://www.tradingview.com/x/JnGKWUqo/
It has now formed an outside range candle down. Watch to see of candle closes that way, and if intraday turns negative.
TJ
ES 30-min: here is the intraday wave counting screen. Indeterminate at the moment.
ReplyDeletehttps://www.tradingview.com/x/bWvH40zv/
TJ
B of 4 on ES ed idea.
ReplyDeletehttps://imgur.com/zRcxydf
DeleteES 30-min: staying within the band 95% of the time.
ReplyDeletehttps://www.tradingview.com/x/S5Q9Anbz/
TJ
GC 30-min: made a $1 higher high, negating the spinning top candle.
ReplyDeletehttps://www.tradingview.com/x/3DFF2wMI/
TJ
There might be a small triangle in there between 07:00 and 11:00 , or else maybe a small diagonal top. TJ.
Delete30 and 10 year can not get off the ground. I still think they need more time to correct but look very weak. I think this is towards the end of an x wave in the correction since fall of 23.
ReplyDeleteES 30-min: did take out the prior up (green) fractal at 5350.00 TJ.
ReplyDeleteNow the second up (Green) fractal back at 5,359.00 TJ
DeleteNow the third up (green) fractal back at 5,379.50 is exceeded. TJ.
DeleteRevised oil flat bottom triangle.
ReplyDeletehttps://imgur.com/0JP2PHR
So far, so good! TJ
DeleteGOLD (GC) 30-min: now below intraday 18-MA watch the fractal low of the "spinning top" candle; down purple arrow. TJ.
ReplyDeletehttps://www.tradingview.com/x/keKFrRHm/
TJ
..and note the funky intraday slow stochastic. TJ
Delete..first down (red) fractal back exceeded lower. TJ.
DeleteI will go out on a limb here and point out that the upward retracement of the past 2 days in the S&P 500 Index seems to be a corrective pattern, composed of multiple (a & b) contracting triangles.
ReplyDeleteAnd despite Wednesday's huge upward swing, there has not been any overlap of the first two bearish waves (circle-i & (1)?), which would negate a Bearish Impulse count.
https://www.tradingview.com/x/kBcd0Rh7/
Also, I think that the decline from Wednesday (after hours), which bottomed on Thursday can be counted as a 5-wave bearish impulse.
DeleteI have noticed that when things are certainly ew waves play out in a way that keeps many options open. In other words ew can not predict future but once the outcome is known it sets out the path. For example right now bb rider Ed and wizard's triangle are both possible the way waves are set up and based on the next few days events the path will be chosen
DeleteCertainly = not certain
DeleteES 30-min: if I just hide the indicators for a second, there is now a higher high, and it's beginning to look like a wedge ('possible' diagonal).
ReplyDeletehttps://www.tradingview.com/x/VB0g1pni/
TJ
maybe measure like this ..
Deletehttps://www.tradingview.com/x/fFO2WeND/
TJ
Looks like the Walmart bulls think it can handle the new tariff regime ...
ReplyDeletehttps://www.tradingview.com/x/opEzTi4l/
Has already taken out the high on Liberation Day. Guess it was a steal @ 80. Also, the five waves of the A leg of the triangle (if that's what's happening) are quite clear. The 5th was about equal to the 1st.
There will be a lot of cross-currents in the SPX due to the tariff changes. Some companies can handle them; others could get hurt badly. So the patterns in the SPX may be confusing for a while.
DeleteRe WMT ... of course, 1-2-3-4-5 suggests 'A' of a zigzag, not a triangle.
DeleteA new post is started for the next day.
ReplyDeleteTJ