In the last post (seen at this LINK), the option of an expanding triangle option was explored. And it is a viable option. Still, there are some contraindications of a triangle that should be talked about. The first and foremost of these is that we don't know that upward movement is over. A certain amount of upward movement could still fit within the range of the expanding triangle, but if it goes too far up, then the expanded flat - or even a further upward wave - should be considered. The second consideration is the time of the Ⓒ wave down. It is quite short in time and looks very sharp compared even to the Ⓐ wave down. So, it might just be the initiation wave of the expanded flat, the (a) wave, with the Minor A wave location moved forward to the location shown in the SPY/ES (CFD) 4-hr chart shown below.
If so, then the current up wave can be counted as w,x,y as part or all of the upward (b) wave of the expanded flat. The time scale shows that the y wave is 2x the time of the current w wave, upward, and the EWO/AO shows it is currently on a 4-hr divergence which is not yet confirmed by red bars.
One implication of the expanded flat is that it could travel significantly lower than just the Ⓔ wave of the expanding triangle. The (c) wave of an expanded flat could travel 1.618 x (a) or even 2.618 x (a) without batting an eyelash. Meanwhile. the Ⓔ wave of the expanding triangle is limited to 1.5 x by rule.
But, even more than that, the expanded flat can start a more complicated series of waves - such as a double-three (double Flat), or a Flat-X-Zigzag to waste more time or create more downward movement if it wants.
So, bottom line, we don't know upward movement is over. Price is still over the 18-day SMA. And IFF downward movement should begin earnest, we should keep two things in mind at the same time. Those are the expanding triangle, and the expanded flat, with its potential extensions.
This is all part of The Principle of Equivalence I have developed which requires some disqualifying information to rule out certain wave segments before proposing that one wave count is more certain, or has better odds, than other.
Until we learn more perspective, patience, calm and flexibility are still the order of the day.
Have an excellent rest of the weekend,
TraderJoe
4:34 AM? My goodness Joe, get some sleep!!
ReplyDeleteI’m thinking a flat here. There’s too much bullishness at this time to support a big, final C wave. We need some historic events to shake folks up & set the stage technically for a run for the roses.
Interesting footnote: Wall Street is now selling heavily to Main Street. That usually ends badly for Joe Sixpack. Margin and credit card debt are breaking records.
Interesting info on the margin and credit card debt, thanks.
DeleteGood work TJ, the NDX,Dow and Japan N225 all to me appear to be in contracting diagonals. The Japan N225 to me has the clearest pattern or wave count with just completing a small degree symmetrical triangle with the breakout possibly ending in the 50,100 area. I count the N225 from April completing a W,X,Y,X,Z with wave Z in a EDT. FWIW. Thanks for your posts.
ReplyDeleteChart of the Japan N225 daily
ReplyDeletehttps://i.postimg.cc/L8WchC9c/2025-10-26-09-10-02-Greenshot.png
And then I have this count of the N225 only one triangle is either in the B or 4th wave position and then the overlap with the EDT. How many waves up? 15? https://i.postimg.cc/cCBQbL4Q/2025-10-26-09-44-26-Greenshot.png
ReplyDeleteWell, the only way we could get fooled now is if price action goes way higher than expected.
ReplyDeleteSo, this morning the 150% level for the potential Ⓓ leg of an expanded triangle has been exceeded. That leaves the two possibilities of the expanded flat, or the next impulse. Neither of these is a surprise. When I say we have 'not' confirmed that upward price movement is not over - that's precisely what is meant. And when I say price is above the 18-day SMA, so the bias is up, that is again precisely what it means. Nonsense comments are going to increasingly put me in a bad mood for nothing, and so, are being deleted.
ReplyDeleteTJ
TJ, my apologies for not including the FACT that you had covered an extended price move upwards, in my comment above. Never any disrespect intended toward you.
DeleteNo worries with your comments, Roy. It's some others that are clearly just more acrimonious. TJ.
DeleteThe upper channel is 6860
ReplyDeleteYep! The exit has been massive during this run to numerous ATHs. One third of Berkshire Hathaway's TAV is cash. Series gaps probative.
ReplyDeleteES 30-min: lower low after the higher high. TJ.
ReplyDeleteES 4-hr: just fyi - we don't know upward movement is over yet. The day is younger. I am only pointing out some Fibo measurement confluences in the futures.
ReplyDeletehttps://www.tradingview.com/x/Y9L6JnHL/
Right now the 138.2% external retrace is 'typical' of expanded flats.
TJ.
More to go in wave 3 another day or two. I have read bullish comments declaring 7900 or the rally will last into February...the market is parabolic already. Just count the waves as I think the path is clear now.
ReplyDeleteYes. Parabolic on the monthly time-frames as well. All parabolic rises end similarly. Oh wait...I forgot...this time is different! 😊
Deletelol
DeleteThe DAX hasn't rallied at all and the JapanN225 appears to still be in a contracting formation in a 4 hour chart. Is 2007 repeating? A top near Fed day? I know better not to call a top.
ReplyDeleteI was thinking the exact same thing today AM. October 2007 finished strong but November brought weakness as markets started to realize the leverage and credit risk in the system. Because two of us had the same thought, it likely won't play out that way =)
DeletePerhaps, but market cycles are entirely indifferent to the HU principle.
DeleteHu Principle,I had to look that up. Variational principle is a step up from my H.S. physics class.
DeleteIsn't fed rate decision tomorrow? I don't see news on any channel.
ReplyDeleteToday (10/28/25) was the WORST market breadth for the S&P 500 on an up day of the last 30 years, or 7560 trading days.
ReplyDeleteToday featured 294 S&P 500 stocks down (~59%) and the broad listed stocks in US exchanges saw 65% of stocks down. Yet, the QQQ and SPY were up - not exactly indicative of robustness.
It's because of NVDA. Up almost 5% in one day.
Deleteinteresting read...https://fedguy.com/balance-sheet-dominance/
ReplyDeleteES/SPY (CFD) 5 -min: lower low after a higher high. Still not enough to change the daily trend yet. FED rate decision scheduled for 14:00 ET. TJ.
ReplyDeleteFOMC Decision: rate cut & end of balance sheet run-off in December (from CNBC).
ReplyDeletehttps://www.cnbc.com/2025/10/29/fed-rate-decision-october-2025.html
TJ
ReplyDeleteES/SPY (CFD) 4-hr: 12 4-hr candles taken out by 1, with high between 150% and 162%. Still within (b) wave range.
https://www.tradingview.com/x/tlHwMedM/
TJ
Yep! Notwithstanding, the BTF Dippers are alive and enthusiastic as ever, God love 'em! 😉
ReplyDeleteAnother Hindenburg omen triggered at the close of market today.
ReplyDeleteA new post is started for the next day.
ReplyDeleteTJ