Waiting Game
For the third day in a row the first hour range has contained the market’s overall movement. In each case, lacking a good setup during this period I can find no compelling reason for taking a trade.
As you can see from the chart, the Fibonacci measurements are still working even if the market is not going anywhere. There were two A-B-C patterns, each turning at 62%, showing a lack of conviction in either direction.
Sometimes, during periods of indecision, the market will make an early move and then spend the rest of the day oscillating around the center point of that range (blue arrow.) As happened today, that’s where the market will often close.
Boring trading, but remember — when the market puts enough traders to sleep it can suddenly wake them up with a surprise move.
Hello,
Using a 45 min chart of the SPX. Do you think, as of the low of June 8, that we are in wave 4 now?
Thanks in advance
j
John,
First two warnings — I don’t actually trade pure Elliott, and I also don’t trade the S&P.
I see the structure you are describing, but I don’t like the first wave. Inside that first wave the two pullbacks are too similar, which does not follow the guidelines for Elliott.
Other than that the overall pattern does look like the first four waves of an impulse pattern, and it could certainly end up being a five wave Elliott move with today being part of a wave four. BUT if we turned down right now (before making a new high) I could as easily call it an A-B-C corrective pattern that stopped at 162% on the 15th.
That’s why I just use Elliott to give me places to look for setups or targets. (That’s also how I use Fibonacci.) When Elliott projections work out they are impressive. When they don’t, they can keep you looking in the wrong direction for too long. The trick is to not let the Elliott possibilities become market predictions, which can make you overlook good setups in the opposite direction.