The Principle of Equivalence says that within the potential barrier triangle we need to consider at least two close-in local scenarios with today's price movement lower that went essential nowhere. The first one is that the minuet (d) wave is completed as shown in the ES 4 Hr chart, below.
That would make today's expanding diagonal downward the lower degree "A" wave of the minuet (e) wave of the triangle. And, again, that (e) wave can take out the prior X wave lower.
The second scenario is that the expanding diagonal today ended the lower degree (C) wave of an expanded flat of a Ⓑ wave - since it went nowhere important - and the (d) wave requires a higher high Ⓒ wave up, to finish the Y wave, now, as in the chart below.
I have no preference which occurs. I have no dog in the fight. On the daily chart, price is still above the 18-day SMA. The rationale for the second count is that often in a barrier triangle prices quickly go over the prior high, then settle back under it on the close using the timeframe of interest (ES 8 Hr or daily here). That hasn't happened yet. It could.
Note, the MACD is curled over on the 4-Hr. There is a 'way' we could have topped. But price extension lower isn't showing it yet. Maybe it will. It just hasn't yet. I'll be keeping my eyes open.
Have an excellent start to the evening,
TraderJoe
fyi - note that in addition to inflation news this morning, FOMC Chair Warsh is scheduled to speak as follows, beginning around 10 AM ET.
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ES/SPY (CFD) 30-min: here's the first reaction to the lower CPI (falling oil prices having helped drop it lower a bit).
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TJ
...after three closes above the upper band (odds 2 - 5%), prices returned to the 18-per SMA, resetting the number of consecutive closes.
Deletehttps://www.tradingview.com/x/zqn9Fkc7/
TJ
...now another spike up. Monitoring for a triangle 'b' wave, with 'c' wave down or something higher if a triangle busts. TJ.
DeleteThanks Tj.
ReplyDeleteES Daily - prior downward gap filled at blue arrow.
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TJ
also, price is still trading above the 18-day SMA, and today would be day three of embedding if that should occur otherwise the slow stochastic is over-bought. TJ.
DeleteNdx 4 hr macd already extended lower. Let's see Spx/es reacts or not.
ReplyDeleteES 1-hour: so, one way to finish the Y wave of the (d) wave of barrier triangle could be with a contracting diagonal like this one, because ③ is shorter than ① in price. But I caution this is still 'speculation' and there are definitely downward count potentials.
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But, so far, price just hasn't gone anywhere important.
TJ
ES 1-hr: Ticks from invalidation at the lows of today.
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TJ
ES 30-min: there was a higher high in the overnight, which 'might' wrap up the (d) wave of the barrier triangle, as shown.
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Then, there was an expanding diagonal, down, which could be a/i of the (e) wave.
TJ
ES / SPY (CFD) 30-min: now undercut the prior ivth wave low of the upward diagonal in 'less time'.
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This likely means we are into the (e) wave of the larger barrier triangle.
TJ
Two closes below the lower band drops the odds to 4 - 6% of the next close below the band.
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But, there is 18 SMA bear-cross 100 SMA, and nothing overtly bullish until/unless price gets over the 18-per intraday again.
TJ
...now tagging S2 daily pivot.
Deletehttps://www.tradingview.com/x/8hmFEvwH/
TJ
The last close was inside the band, resetting the number of consecutive closes.
Deletehttps://www.tradingview.com/x/PPWXXzER/
There is now some upward overlap, but it's not fatal. Still, something to watch out for.
TJ
A new post is started for the next day.
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