From our post at this LINK on Saturday, we said we thought we were making a large ⓑ-3 wave up. That assessment has not changed. This is what the current wave count looks like on the ES/SPY (CFD) 4-hr chart.
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| ES/SPY (CFD) - 4 Hr Close Only - Elements of an Eventual Minor B Wave |
This morning's dump should be watched to see if it nears the lower parallel, and/or holds there or near there. Double zigzags often form remarkably precise parallels - but we know 'this' market.
This is a further reminder that today is the last trading day of the month, with a Monday holiday, and so Tuesday may see the inflows from the typical passive sources we have so often noted (company bonus plans, 401k's, dividend roll-over schemes, etc.). And the Smart Money may try to front-run such sources, but this is not a requirement, sometimes they are patient and wait.
Eventually, the ⓑ-3 wave could reach the upper parallel, and - while likely - that is not a requirement either.
Have an excellent rest of the day.
TraderJoe
I have very very little confidence in almost any count. I hear we are adding 1 trillion of debt every 150 days so the shenanigan meter may be running to hot for counting.
ReplyDeleteThe one thing that I think could possibly be the tell is the bond market.
https://imgur.com/JDRwnTe
To a large extent we are saying the same thing here. My guess is that you are feeling the effects of the switch from monetary stimulus to fiscal stimulus. Previously, it was only the FED that provided stimulus. More recently, with Covid, there was a switch where the Congress provided stimulus in the form of the direct mail checks. Then Congress approved the infrastructure bill which is still at work providing jobs in construction and service - one reason the job market hasn't imploded. Most recently in the BBB, major tax breaks were provided to seniors for 4 years. So, they will either spend it or buy assets (stocks, bonds) and services. This latest program hasn't 'hit' fully yet, because few seniors have filed their taxes for next near although some may have stopped their withholdings already. All of this is tedious to those expecting the major stock market decline soon. And that is the benefit of the Bill Williams method. I mean look at the daily chart.
Deletehttps://www.tradingview.com/x/t0NFYyST/
Price is currently above the balance line. Upward fractals have been hit as price has exceeded them. That part is 'bullish'. The crosscurrent is that there are three higher highs on declining momentum peaks. This analysis is 'objective'. There is no 'one' to believe. That analysis is unable to be argued with.
But does it always work? Heck no. Look at how the Aug 1st decline broke through the Jul 16 and Jul 22nd fractals. The Jul 22 break was a 'good' one and resulted in some downward profit if one took it. But the break of the Jul 16th down (red) fractal was a clear 'trap'.
But Bill Williams would argue, but none of those breaks was substantially below the balance line (the blue EMA-34). So, they might be 'take profits' but not 'new sells'.
I would add there is not even a clear, entire whole bar and close below the EMA-34. Does not this provide the majority of what a trader needs to know? You notice that even though I am 'counting', and I am out of all the overnights because of the 'tariff terrorism', I have not gone 'full sell', right?
The chart is why. "Want what the market wants".
TJ
I agree. One has to trade the market they got not want. Running multiple disciplines help and right now Ira and Bill are helping as we continue to count.
ReplyDeleteI would think that with soybeans below 9 dollars because of "the greatest tariffs ever", more checks are coming.
Thanks for all the work! I check in a few times everyday, just not much to add in this environment.
A new post is started for the next day.
ReplyDeleteTJ