May 15, 2021

Weekly preview

Volatile week we saw 10w low and now close to 5w high. The cycle high was mid-April, the indices are topping and the pattern is similar to Jan-Feb last year.

P.S. Updated the post "Trading System" see the links on right side. I have tried to explain how to use cycles and MA10 for low risk trades.


TRADING
Trading trigger - testing MA10. Sell if we se turn lower next week.
Analysis - sell signal, not confirmed we have transition from 18 month high into 18 month low.

P.S. - for a trade both analysis and trigger should point in the same direction.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - more zig-zags lower and higher. I think all this is part of a bigger zig-zag lower.


Intermediate term - I see one big zig-zag up consisting of two zig-zags. You can count it as W-X-Y(red) classic EW, but there is no impulses, more likely series of zig-zags A-B-C(yellow).
Lower to MA50 and bounce classical TA, now caught between MAs and trend lines. All part of topping process the direction is lower.


Long term - the move from March 2020 is completing and we are seeing transition from up to down. Expect 6-8 weeks lower and we will watch how big the decline will be.


MARKET BREADTH INDICATORS
Market Breadth Indicators - are in sell mode.
McClellan Oscillator - made lower low and broke the trend line connectiong all the lows since March 2020, now retracing and close to zero.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - pointing lower, but above 70.
Percent of Stocks above MA50 - turned up, but not close to the previous highs.
Fear Indicator VIX - forming big wedge from the March 2020 high - touched the upper trend line this week and retracing. I expect higher low and break out from the wedge.
Advance-Decline Issues - weak, but still has not broken convincingly lower, at the moment in the middle range.


HURST CYCLES
Short term cycles - it looks like 10w low this week. I wrote a few weeks ago it counts better as three longer 20d cycles instead of four and it seems this is exactly what happened. The highs - the indices are close to 5w high. It is already long enough 20 days/4 weeks... it could turn lower on Monday or it could take another 2-3 days, cycles vary we have to wait.
With the price action this week the model with 18m high mid-April makes more sense it is the one which looks better anyway.


Week 28 for the 40w cycle.

May 8, 2021

Weekly preview

Some indices like SPX,DJ,NYSE made new highs so the top is maybe one 5w cycle later.... or it is the same setup like Jan-Feb last year. This 5ww cycle needs another 3-4 days so watching what is happening next week.
Judging by the level of bullshit and insults, I have to listen, I am 100% sure we are very close to reversal.


TRADING
Trading trigger - buy signal. Most likely daily cycle low this week and daily cycle high in the next days - this will explain why RSI is not looking very supportive for a rally.
Analysis - sell signal expected. Inflection from 18 month high to 18 month low is imminent.

P.S. - for a trade both analysis and trigger should point in the same direction.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - plenty of zig-zags in both directions... according to cycles a few more days are needed, below 62% retracement(4170 red line) it is over.
Some will count it as impulse 1-2-3 - I am sceptical, from the March low zig-zags everywhere.


Intermediate term - I see one big zig-zag up consisting of two zig-zags. You can count it as W-X-Y(red) classic EW, but there is no impulses, more likely series of zig-zags A-B-C(yellow).
Waiting for the market's final strokes to complete the pattern. RSI is sending clear message that the pattern is completing.


Long term - the move from March 2020 is completing. Expect 7-9 weeks lower and we will watch how big the decline will be.


MARKET BREADTH INDICATORS
Market Breadth Indicators - still weak and ready for a top.
McClellan Oscillator - above zero, multiple divergences.
McClellan Summation Index - neutral, weak with divergences.
Weekly Stochastic of the Summation Index - buy signal, but probably topping.
Bullish Percentage - double top, weak with divergence.
Percent of Stocks above MA50 - short term divergences.
Fear Indicator VIX - short term divergences.
Advance-Decline Issues - weak with multiple divergences.


HURST CYCLES
Short term cycles - most likely 10w low occurred 2-3 days earlier and now heading into 5w high. For comparable length another 3-4 days are needed to complete the 20d cycle and probable 18m high.
Another possible model to satisfy the high-low sequence and the new high this week. The problems - the first 5w cycle is 5-6 weeks long when the usual length is 4 weeks, we do not have high followed by a low rather stretched somewhere in time with higher low, other indices like DAX/NDX did not make higher high... I do not know which one is better - this one or from last week.
The more important for both models the lows are the same - the 10w lows seem to occur very regularly.... if it continues the same way the final low should be the first week of July.


Week 27 for the 40 week cycle. If the model above is the right one the 40w cycle high is now 36 weeks long pretty stretched.