Triangle/Diagonal Video

Here is a great video from Elliott Wave International that does a very nice job of explaining triangles and diagonals. Go to video #3.

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Crude

Crude had its 9th consecutive positive close today. The range really tightened up today at $1.39.

The daily put in a small bodied spinning top/doji candle. We ran into stiff resistance at the 61.8% retrace from the high and the 3 bar daily projection around 69.

Obviously my interpretation of structure was incorrect. I believe that crude is tracing out a double zigzag (WXY) for this B leg. This occurs when the first zigzag has not adequately retraced enough in terms of price.

I'm showing a 120 minute chart to get rid of some of the noise. Notice the beautiful channeling. You may have also noticed the 14 bar cycle i have had on there for a few days.

This is based on the 59.30 L and the 60.02 L (the first two lows). There has been some nice hits with this cycle, by no means perfect, but still impressive nonetheless.

As far as targets go, W = Y at 71.14, while the 78.6% is at 69.59. The 261.8% projection of A comes in at 69.66 and the 4 bar daily projection sits at 69.69 (lucky it). So we have a pretty good confluence of numbers in the mid 69's.

The targets assume, of course, that the structure has not completed. At this point, that's my guess. The action that we had today is indicative of a 4 wave. If that is the case, the probabilities are that the retrace will not be deep. The 23.6% is at 66.70

Here is a nice (and easy) setup that happened today. Several things came together to make this a no-brainer:

1.) we reached the top of the channel and

2.) a 5th wave was completing and

3.) they threw a doji candle at us

Easy money folks.

ES

Es finished higher on the day for its 10th positive close in the last 11 sessions. Range was 16 handles, while volume contracted for the second day in row.

There are several different scenarios that may be in play here. As mentioned in eChat, we may very well be tracing out a triangle.

This would be a running triangle because B exceeds the high of A. I am not sure D has completed at this point, so I may need to adjust the upper boundary line.

There is also the possibility that this is an Ending Diagonal (ED). We have two sets of 3 wave structures off of the 948.25 L, and appear to be working on the third currently. I show that alternate count at the bottom.

This is a 1.50 point range chart that shows the triangle in better detail.

Aso, notice the dark red channel and how that has acted as resistance. This is the 2-4 line. Once broken, this is exactly what we would expect.








The small lotter's started buying the 969 L and basically continued into the close. The bigs did not start in earnest until we made the failed low at 970.75 (VO was long at 72!).

Sure looks like wedging action to me.

There are also a couple of other possibilities that may unfold over the next day or two, but rest assured, this pig is very close to giving us a sizable retrace of this leg off of the 965.25 L.

I stuck my toes in the water on some puts today. Just a 1/4 position though, as I'm likely early.

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