Friday's "spinning top" or "doji" candle was given a candle confirmation today as shown by the daily chart of the SPY cash ETF, below. In the process, the latest "three-touch" trend line was broken to the downside.
This could mean that the 'c' wave of an expanded flat correction since 18 Nov is complete, but the evidence is only preliminary in the fact that Friday's higher high occurred on a divergence with the EWO as shown. Also, the swing line has a lower low but is still above the 18-day SMA, so the two cancel each other out. Again, price is still above the 18-day SMA, and the daily slow stochastic is still embedded. As a brief reminder, we showed the expanded flat potential in the post at this LINK.
So, IF the expanded flat count is correct, the market should start down in a really substantial way over the next couple of days. And, if it is not correct, the alternate count is that an expanding diagonal ended at the low on 21 Nov.
There should be lots of news to ponder over in the course of the next week, including an FOMC decision and press conference on Wednesday. Because of the conflict in the local technicals (they are all not in gear) calm, patience, and a high degree of flexibility are still required - both in wave counting and in trading.
Have an excellent start to the evening,
TraderJoe
TJ, for those of us who are still considering a Triangle for B, do you have any thoughts on that subject?
ReplyDeleteBecause of the lower low at ⓒ < ⓐ, my understanding is that the qualifying pattern is the expanding triangle. Luckily, wave ⓑ met the 'rule' of 150%, max. And it is listed as a 'rule'. Then, waves ⓓ, and ⓔ would be expected to meet this rule, also.
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TJ
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DeleteES/SPY (CFD) 5-min: plausible failure and wedge breakdown. Let's see if the low is exceeded - preferably in less time - or the high is exceeded first.
ReplyDeletehttps://www.tradingview.com/x/jSlmlgNW/
TJ
Down wave is now longer than prior down wave which tends to rule out a continued contracting diagonal.
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TJ
..and that measurement holds even from the potential failure wave. TJ.
DeleteStarting down here. My guess is people will think it's bullish if the market is "low" before the Fed. According to your count it wouldn't be at all.
ReplyDeleteAlso note the vix looks like a wave 1 with an abc complete on the hourly.
Very wily market with lots of head fakes. Caution warranted IMHO...
ReplyDeleteSPY/ES (CFD) 5-min: enough waves for a diagonal lower.
ReplyDeletehttps://www.tradingview.com/x/594MIYrO/
Also, possibility of nested 1,2's, lower.
TJ
IF accurate, the prior low was undercut slightly, but not in less time.
Deletehttps://www.tradingview.com/x/hnu1ev24/
TJ
Also acceptable, and with the characteristic underthrow.
Deletehttps://www.tradingview.com/x/lH7zs3Az/
TJ
Looking at just the DEC ES futures (not the CFD), they did, indeed undercut by 0.50 negating the prior morning up wave. TJ.
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