This morning in the wee hours, a lower low was made below the Prior Low (PL) of the previous post. As such, the upward variety of expanding diagonal invalidated in a bout of sheer whip. The SPX500 (CFD) 4-hr chart is below.
This now leaves the potential downward contracting diagonal as a way to end minute ((iv)). This count is subject to the usual rules for a contracting diagonal. First, we don't 'know' that wave iii is done, but it would have to remain shorter than i for a contracting diagonal. Then, too, when wave iii is done, wave iv would have to remain shorter than wave ii. And, of course, in this scenario wave iv can and would likely overlap wave i but not travel beyond the end of wave ii. If that succeeds, then wave v would have to remain shorter than wave iii.
This is also a reminder that wave v in an overall (c) wave of minute ((iv)) is allowed to 'fail' if it wants to in order to signify the end of a downward wave.
None of this is locked-in-stone. It is all contingent, but the lower low does provide a clue as to possible price direction. Again, nothing lower will surprise us. There is a way for price to have topped in this and in other indexes. But this is an effort to give the broader market a ending pattern at large degree. We'll see if that happens.
I will also note that some other Elliott Wave analysts were expecting a (ahem) [iii], up, here. I guess they got fooled by the new low, and we did not. But, I've been fooled before, too. Very few readers read the prior post, so, if you haven't, you may wish to review it now.
Have an excellent start to the day,
TraderJoe
SPX500 30-min: from the intraday wave-counting-screen. Violent whipsaw behavior with 50+ pt swings near the open.
ReplyDeletehttps://www.tradingview.com/x/nNWDt74P/
Remember: in this situation wave v? does 'not' have to make a new low although it certainly can.
TJ
SPX500 5-min: there is now another low below the overnight low (ONL), and this can still be iii or v. 'Cash' suggests it is iii, but, we'll see.
Deletehttps://www.tradingview.com/x/2khRmABr/
TJ
Thanks Tj. Interesting to see how tomorrow the count folds long term?
ReplyDeletefyi only - the futures roll date has occurred and the difference is about +67 points, as expected (i.e. 7,667 Dec vs 7,600 Sep) this leaves a whack-a-mole situation where the roll-over contract did 'not' make a new low, and made another gap-up instead, as in the link below.
ReplyDeletehttps://www.tradingview.com/x/aFmyzOPq/
Whereas both the SEP and DEC lead month contracts each did make the new lows.
TJ
Reminder: today is an FOMC decision day and scheduled presser after the rate announcement. TJ.
ReplyDeleteSPY (Cash) 15-min: opened a gap this morning to close a gap yesterday. Just bangin' around like mad.
ReplyDeletehttps://www.tradingview.com/x/Ac6uYOIZ/
TJ
5 up?
DeleteI think we have entered a period in which the economy bifurcates. The AI economy is expanding at a high growth rate and +25bp rate adjustments are minor speed bumps for it. AI's demand for capital is starting to push up borrowing costs for the consumer and the USG. Some consumers are in the AI economy, so they will continue to spend on luxury goods and services. The rest (80% at least) are getting priced out of a good life style and have become unhappy people and unhappy voters. How do you see this playing out in terms of the broad market indexes??
ReplyDeleteMaybe not 80%. The folks who work in traditional large corporations *that continue to be employed, not riffed* will be in a position to share in the profits that will accrue to those companies that are in a position to take advantage of AI to improve their productivity and profitabililty. So, maybe 1/3 will prosper, the rest will be left behind. Eventually the USG will institute a new AI Social Security Program to help them retrain for new employment or just to keep them afloat financially as the traditional job market deteriorates.
DeleteI saw no mention of these looming problems in Kevin Warsh's comments this afternoon after the 25 bp hike. It's still business as usual.
Base channel broken.
ReplyDeletehttp://tos.mx/!VPlD4hib
SPX500 (CFD) 2 Hr - the suggestion was we were making a diagonal downward and that lengths had to be monitored. After the interest rate announcement, price ran for the exits and violated lengths for a contracting diagonal. This leaves an expanding diagonal on the table as the wave lengths currently fit - shown below.
ReplyDeletehttps://www.tradingview.com/x/MTa8GoCG/
The minute fourth wave ((iv)) is still valid at this length. If it should violate we need to conclude there is a top of some kind in place. So far, it hasn't. Be very, very, very, very careful as this count could be incorrect, and ((iv)) could still form a w-x-y double-ZZ which would still be in the zigzag class and acceptable for the minute ((Iv)) correction.
TJ