Sunday, November 19, 2017

The elusive, mythical leading-diagonal

Off the 2597 SPX high, we actually have a five-wave decline that could possibly be an elusive "leading diagonal", which is similar to a terminal ending-diagonal, but whose triplets and overlapping waves signifies the uncertainty at the beginning of a directional change instead of its end.  Daneric has suggested these numerous times over the years, each time proving to be a bust, so it's achieved something of a mythical status, a chimera, a unicorn, possibly apocryphal Elliott nonsense.  But we'll give it a shot.

the lion in winter

The market lost steam on Friday precisely at the .618 retrace level of the drop from 2597 to 2557, so we have the remote possibility of both a leading-diagonal and an initial channel south, which will reach its low in the week of the next fiscal cliff deadline, 12/8.  Congress will keep the wheels greased at the 11th hour and rally us through Christmas.

Red /ES tonight would mean we are starting a larger 3rd wave down, which will intensify as the Press fans the flames of a fiscal wreck into December.

SPX leading-diagonal and possible new channel