NQ Road Map – Jan 10/19 …

Price is getting close to a potential turning point …

NASDQ 100 Index Futures – 60 Minute Chart #1

Sometimes trying to guess too early the shape of a corrective wave can cause you to draw the right conclusion. Typically I like to see a break of the 60-min (or 65-min if using TC2000) ATR levels before I begin to try and count waves to see if a wave price structure can be determined.

The 60-min ATR support for the NQ was broken today so I am now updating what I think the wave count is most likely for this bounce into SLOT resistance.

As you can see, price is just above the 1.272x C-wave extension target and below the upper level of the SLOT (i.e., the 78.6% level). Note that this is also very near to the median resistance/support line of the broadening price pattern I have been following for the NQ futures contract.

From a time perspective, the C-wave will be equal to 100% of the A-wave on the 3pm-4pm candle today (January 10th) … so to me timing and price finding resistance in the SLOT here makes sense.

Now all I really need is to see if I can see an obvious conclusion to a smaller wave structure (i.e., the waves inside of the final C-wave move higher).

NASDQ 100 Index Futures – 60 Minute Chart #2

To me it looks like we could be making the typically expected 3-minor wave C-wave … the high of my 2nd wave is 6645.00 – the high so far today is 6628.25.

One thing to keep aware of is that waves in smaller time frames often fail to complete, in part, because of the stronger forces of the bigger time frame price structure. What I am saying is that if price fails to make a new minor 3rd high for the C-wave, it is still possible that the move higher was actually completed today with that failed iii-wave.

Bottom Line … maybe the bad retailer announcements today along with American Airlines taking down estimates are enough to cause price to fail in the last little leg higher. Be prepared for anything.

I have not seen anything to make me think that my bigger wave count is incorrect, so I am still looking for resistance to take hold.

Cheers … Leaf_West

S&P 500 Road Map – December 3, 2018 …

Let there be light …. the Donald seems to have delivered once again with China, and the market is gapping higher coming out of this weekend’s dinner date with the Chinese President.  Time to take a look at the markets to see where we are versus our road map …

Here is a wave count chart for the S&P 500 Index from my November 21st posting (click here for that post).

S&P 500 Index – 195 Minute Chart #2 (November 21st)

You can see from the above chart that I am expecting the market to find resistance right above the a-pivot high (2815.15)  Since the market has not opened and therefore, the S&P Index does not yet show us the indicated move, I will use the ES mini futures contract as a substitute for the S&P 500 cash index.

S&P 500 Index Futures Contract (ES_F) – 240 Minute Chart #1

The a-wave pivot high is 2818.00 on the ES futures contract … the high so far overnight is 2814.00.  I am showing my timing windows on the above chart as well.

You can see that the minor-a wave high (purple) for bigger B (red) came right in at the 1.382x timing window … the minor-b wave low (purple) for bigger B (red) came in right at the 2.0x timing window.  It appears that we are pushing right into my expected resistance level for the end of bigger wave-B (red) here at the 2.382x extension window which is scheduled for tomorrow in the overnight trading session (2am – 6am).

So the proof in the pudding will be shown the next couple of days … let’s look at the wave structure of the last move here into what I think will be resistance.

S&P 500 Index Futures Contract (ES_F) – 240 Minute Chart #2

You can see from the above chart that the minor-c-wave into the B-wave high is making what looks like a normal 3-wave pattern.  It looks like we are near the end of the minor 3rd wave which will also mean that the B-wave is complete.

S&P 500 Index Futures Contract (ES_F) – 240 Minute Chart #3

If we do find resistance and start to move lower, I think that would be proof that we are going down to complete the bigger ABC structure.  My minimum C-wave target is the 1.272x extension target which is around 2510 on the ES futures contract.

Bottom Line – most traders will be thinking that this move of the last week or so is the start of the Xmas rally and that we are headed higher to make new all-time highs.  I obviously don’t believe that we are ready to do that, and we are, in fact, about to start the biggest, most viscous part of a corrective wave (the c-leg).  I want to watch closely here over the next day or so to get confirmation that the B-wave is indeed complete and we are beginning the next leg lower.

Cheers … Leaf_West

Is Downtown Josh Brown Whistling Past the Graveyard?

“Downtown” Josh Brown named JPM his final trade today for the half-time fast money show.  Is he correct in his expectation that JPM is a screaming buy here?  Only time will tell, but there is a lot of overhead supply facing the market and JPM here after the damage done by the market in October.

JPM – 65-Minute Chart #1

If my read of the overall market corrective pattern is correct (i.e., ABC correction), then JPM is likely to find resistance in the SLOT and pull-back one more time.  That pull-back may make a higher low which will be bullish or it could follow the market down and make a lower leg (i.e., a final C-wave move).

There are lots of buyers of JPM during the market weakness that may be willing to sell their shares if they can get back to break-even.

JPM – 65-Minute Chart #2

The whole run-up in JPM from this past summer has also produced a lot of stranded traders down here at the current levels … the Point of Control that needs to be taken out before I would consider JPM bullish would be that $113.50 – $115.50 zone vs the $108.00 current price.

Cheers … Leaf_West

Overhead Supply / Resistance Areas …

Tonight’s AAPL earnings report is pretty key for the market … if the outlook is disappointing, then all bets are off about what could happen in the market the next several days.  I still think that the market is set-up to bounce higher into the SLOT resistance zones and therefore I want to do my work and be prepared for that next move into the final resistance levels.  Here are some looks at the volume profiles for the two key futures contracts that I trade. Continue reading