Here's an original Fibonacci study done today on the Dow. I have not seen this idea elsewhere - just to expand the Dow 1929 top from its origin in the first prices available and 1932 bottom in "log Fibs" and see what that gets us. So, I worked this one up this morning and it has some interesting 'hits'. They absolutely are not 'precise', mind you, but they are very much in the neighborhood.
Keep in mind, regardless of the degree symbols used (I just chose these as if I was preliminarily studying any other chart) that the peak RSI is usually on the third-of-three, and the divergence is on five-of-three.
Further, we are up to and slightly past the 2.618 "log" expansion not to mention that price is squeezing out of the upper log trend line, depending on how you draw it (Gulp!).
Have an excellent rest of the weekend,
TraderJoe
Fascinating portrait. It will be quite interesting how Mr. Market responds to the "Working Group"'s attempts to forestall a trip to a 4th wave of 1 lesser degree. Will the path be precipitous? Or protracted? Should be quite fun watching the feathers fly!
ReplyDeleteNice idea and nice work! If this idea stands up, and after we've tagged red 3, alternation says we should expect some sort of long drawn out correction. If its a triangle red 4, the first leg's bottom might be the nominal low. They will throw the kitchen sink at it to keep it afloat. RR's "Inflate or Die".
ReplyDeleteThx & yes, I would agree with the type of 4th wave assessment, bearing in mind that the "a" wave down of a triangle can be the most dramatic sequence of the remaining b,c,d,e. TJ.
DeleteA prospective multi-year Elliott 4th wave aligns very well with S&P expectedreturns going forward. A triangle perfectly fits the bill for years of sideways meandering to nowhere!
DeleteWow! Thanks Tj. Do you have for Nasdaq too?
ReplyDeleteAny reason for not using the running correction after the 1929 high that you came up with?
ReplyDeleteI just figured most people (bankers, hedge funds quants, etc.) would most likely measure to the price extremes. TJ.
Deleteand see below @ 9:59 am. Thx. TJ.
DeleteNo idea if you played around with many ALTS (esp fib wise), but a friend replied to my sharing your take on this by building out an extended 5th wave (within red W3 still) from 1982. To get there, after the 1932 W2 low, he has a lower degree w2 of W3 for 1937-42, then w4 of W3 ending at the nominal low ca 1977. Everything after is the subdivided, extended 5th (of red W3). This would put the RSI peak at the w iii within w5 within W3, not the 3rd of 3. I don't see any technical reasons to argue for this extended count. But it would align with everything getting financialized post BW after 1971. His next fib target, fyi, would then be ca 48.1k. My work sees a case for a top in Nov, fwiw.
ReplyDelete"an extended 5th wave (within red W3 still) from 1982" Make that from the lows nearer to 1975 (not 1977). Eyeballing those.
DeleteGot a chart to share?
DeleteThen all the corrections are degree violations in 'time' because 1929 - 1932 is only 3 years, and 'all' of the significant corrections (74, 09) are 'longer in time' than that. As I have written about extensively, I think that 1942 is the actual low of 2. I am showing 1932 as the '2' only for price measurement purposes. See chart below.
Deletehttps://www.tradingview.com/x/l8lorK1k/
If degrees matter at all, I think this must be correct for the reasons shown.
TJ
Hi Roy .. thought I responded. But no, not on the web. I do have a jpg, if you post a disguised email I can send it.
Delete"Then all the corrections are degree violations in 'time' because 1929 - 1932 is only 3 years" Yeah, I've followed that line of argument. BUT it seems counter intuitive to dismiss an 85% decline as insufficient in time to qualify as higher degree. Perhaps the rule should be points OR time. OR percent even, since we've been in a non linear world for the last few decades.
Delete@pedro; then one can label the charts any way they wish. Either degrees have a definition relating to smaller and larger waves in price & time; or they are a pure fiction. A Mongoose is not an 'animal' OR a 'plant'. Degrees are just definitions that are supposed to describe real phenomena. Smaller degree is supposed to mean smaller wave. Larger degree is supposed to mean larger wave. My experience is that most analysts 'do not' want to consider time because they don't know how to do it. TJ.
DeleteWith all due respect TJ, then something is wrong with the Rules. "Either degrees have a definition relating to smaller and larger waves in price & time; or they are a pure fiction." Why can't degrees be defined by one OR the other? Lets take 1987. Dow went from 2600+ to 1700+ in three weeks in that sustained move. And three months for the whole leg. But because of TIME that 30% decline must be some low degree wave?
DeleteWithout seeing your precise proposed degree labeling I can not comment. TJ.
DeleteWhile you are thinking; here is what I think of the move to the year 2000, including 1987. Please read all the captions, because if we ever do have a significant move down, you are going to see some "running waves" in that down sequence too. They will fool everyone - including me.
Deletehttps://www.tradingview.com/x/Tc2hFss1/
TJ
SPY 1-hr: there is downward overlap on the prior highs. Upward is triangle or diagonal. Downward is diagonal only.
ReplyDeletehttps://www.tradingview.com/x/znuD5dm0/
TJ
A new post is started for the next day.
ReplyDeleteTJ