Mar 17, 2018

Weekly preview

Short term view - not sure I do not see reversal lower, the indexes do not look bullish either... I think up then down.
Intermediate term view - it takes too long I do not expect wave c of 4 lower. At the moment I think the top is in and we are seeing multi month wave 2/B to test the top (see the charts from 2000/2015).

The major indexes SPX/DJI/NYSE did not show signs of strength this week so ED looks now unlikely for the major indexes. Short term it is a mess SPX squeezed higher high but with a-b-c move, DJI looks like triangle only XBI,RUT continue to follow the plan w2 of ED, but one more low is needed for confirmation.
Intermediate term I expect move lower with higher low then up.I think the top is behind us and wave 2/B is running alternate the coming low will be 2 of V.

The next bigger move will be lower all indexes are showing corrective structure and the NDX strength can not cover it up. The obvious pattern is wave C lower to finish zig-zag for wave 4. I have some problems with that:
- everybody watching the same pattern lower lows - the market does not do what everybody is expecting.
- it takes way too long and we have right translated 40 day cycle, which is bullish expect higher low and the next 40 day cycle with higher high.
- you have to squeeze NDX in expanded flat - fear does not work this way. Bull markets lead to too much greed and sharp corrections follow either wave A or C is the panic wave you do not panic twice. With expanded flat the coming wave C should be even bigger and scarier. Panic sell off twice in the same pattern within a few weeks is very unlikely. So on this scale 10%+ correction the pattern does not make sense.
- on the other hand NDX made a higher high with three waves which means this is not the top.

What I want to say - expect a higher low and another move up to test the high. With higher low the options are wave 2 of V or the top is in and this is wave 2 or B of a bigger pattern lower. The strong index NDX - it does not look so strong when you look at the weekly and daily indicators and I think NDX will not pull up the other indexes higher.
So the scenario which I follow is ED for NDX and for SPX,DJI,NYSE wave 2/B(see the charts from 2000/2015) and keep an eye on possible 2 of V if I am wrong. The problem with the bullish scenario is w1 is too big wave 3 should rally 20% for 2-3 months. Another parabola in a few months with a panic in between is less likely.

Short term - I can not say if the first wave higher is finished or not, but the next bigger move should be lower. One option is wave B flat is already running, the other option is one more high for a diagonal. After that I expect 61,8% Fibo retracement to the support zone.

Intermediate term - preferred scenario 2/B(red). I see similar pattern like 2000/2015 multi month corrective move up to test the high.
Alternate wave 2 of V(green).

Long term - I think it is more likely that the move from Feb.2016 is over and the last rally will make lower high.

Market Breadth Indicators - look positive pointing up. Not very strong, but not bearish either.
McClellan Oscillator - above zero.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - in the middle of the range.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - bounced up from the 13 level. The normal lows are 13-14 not 9-10 so not a surprise.
Advance-Decline Issues - lower high with a divergence.

Day 24 of the 40 day cycle. For me this move up takes way too long. I expect right translated cycle and another higher high for the next daily cycle.

Week 5.... as I said it takes too long and I think a new 20 week cycle is running.

How this 2/B wave looked like in 2000 and 2015. So far the pattern looks similar. In 2000 NDX made higher and SPX/DJI lower high. Some are saying when NDX makes higher high SPX should follow. I would say - why not non confirmation? The major indexes sending a warning that the trends ends?

Mar 10, 2018

Weekly preview

Short term view - first we have to see what happens on Monday.... I think higher.
Intermediate term view - I suspect the correction is over.

We have the move up as expected... the confusion is the indexes show huge difference in strength - SPX/DJ/NYSE weaker with SPX testing the last high, RUT/XBI strong higher high this week, technology sector NDX/SOX very strong with new high.
Either they have completely different patterns which is unlikely or the same pattern looking differently. That is why I think the correction is over and there is no complex corrective pattern rather an impulse and the indexes are just showing different strength.

What are the options - bullish and bearish "extremes" if we have 1-2 and i currently running we will have monster impulse higher 2-3 times bigger than the January parabola or bearish wave B for a huge flat and lower low with an impulse which should cause a lot of fear again. I think we have fear and greed extreme emotions behind us and this scenarios are less likely.
The other options are the price turns lower on Monday and we have 2 of V or it continues higher to finish impulse from the March low, but instead of monster impulse we have a-b-c from the February low for 1 of ED explaining the zig-zag look for indexes like RUT and XBI.

Short term - indexes like DJ NYSE EEM look weak and show only zig-zag, SPX looks better challenging the high. If the price turns lower on Monday expect wave c of 2. If the price continue higher and finish an impulse I suspect wave 1 of ED.

Intermediate term - the "extremes" shown green if you use standard measurement we are talking about 700-800 points for 2-3 months and January not even worth mentioning:), red we are talking about flat and wave C should cause most fear and had it already with the first leg lower, the trend line will be broken and so on.
That is why am thinking about something more realistic if we see wave 2 it looks like normal impulse or if we have ED again something like 3000 and weakness for the final wave fits very good too.

Long term - one more rally before the bull market is over.

Market Breadth Indicators - look positive.
McClellan Oscillator - above zero.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - in the middle of the range.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - resseting to the usual normal low range 14.
Advance-Decline Issues - in the middle of the range.

Day 19 of the 40 day cycle.

Week 4 of the 20 week cycle, I assume the correction is over.

Mar 9, 2018


This is how the futures look like(CFD SP500 4h chart).... from the lows in February I do not know how to twist the pattern as bullish... diagonal?
We have the move up this week but this move from the March low does not look bullish either. It looks like corrective a-b-c and MACD retracing to the trend line. I think the indexes will turn lower and the two options are wave C of IV to finish the correction or higher low around 2600 for another a-b-c - wave 2 of V?

The indexes show a lot of differences. If you try to synchronize the pattern for all indexes the choices I see are - wave C/IV zig-zag for all indexes(NDX flat which is zig-zag too) or the correction is over and this is wave 2 of V and NDX is the strongest index and the others are just weaker. Yes, for some indexes impulse higher is questionable, but it will not be the first time to see such "ugly" impulse.