Jul 11, 2020

Weekly preview

Choppy week with zig-zag lower and zig-zag higher so far. For the weaker indices DI,NYSE,RUT the pattern continue to look like triangle for SP500 like the yellow pattern from the hourly chart last week.... all this heading into 5w cycle high some counting it as 20w high. It could squeeze another 1-2 days higher, but time and pattern look mature for a turn lower.


TRADING
Trading cycle - the trigger is on buy. The price tested MA10 making 10d cycle low and RSI tested the MA. Most likely we have completed daily cycle with length 31 trading days. Now the next one running at day 9 - it looks weak so far I expect to fail as left translated and it will decline for the final leg of the correction and for a few weeks to complete the 20w cycle.
Alternate we have 20w cycle low late June... because usually the 20w cycle consist of two such daily cycles.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I am watching a-b-c pattern with complex b wave as w-x-y. If we see the move higher continue longer than another 1-2 days or higher around 2300 this is in fact bearish and it is most likely Z wave the red count.


Intermediate term - expecting c wave to complete correction. Lower target for the decline at least to 38% retracement and closing the gap makes more sense. Again if you are bullish you do not want to see continuation higher the red path. This will mean the move from the March low is complete and it will decline until November.


Long term - currently I think the bull market completed in 2018. Since then a bunch of corrective waves. Watching this pattern at the moment as most likely... but with corrective waves often you have to adjust so stay open minded.
Because of the NDX I added this "or X" if we do not see correction it will not make it higher until October. We will see a top now.


MARKET BREADTH INDICATORS
Market Breadth Indicators - are in sell mode.
McClellan Oscillator - below zero.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - turned lower.
Percent of Stocks above MA50 - up and down in the middle of the range.
Fear Indicator VIX - time for the next spike?
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
Short term cycles - I think we had 10d low this week and now heading into 40d/5w cycle high. After that the indices should turn lower for 5w cycle low to complete the 20w cycle.


Week 16 for the 20w cycle. We should see decline for 2-3 weeks to complete the cycle. Alternate we have 20w cycle low late June... this will be very bearish development.

Jul 4, 2020

Weekly preview

The last minor high tested instead of acceleration lower - not a big surprise. The indices look different - NDX making new highs looks like ED, SP500 sideways move looks like flat, the others like DJI,NYSE,RUT look weak maybe triangle.

Short term momentum turned up and my system is on buy so until I see reversal with impulse I can not exclude more to the upside even if it is only a few days.
Intermediate term market breadth says correction is running for a few weeks and it is not complete, cycles - we should see a few weeks lower for 20w low counting a low at w12 or w14 looks strange, the pattern from the top in June looks incomplete.
My conclusion - even if we see a few more days higher for the patterns(from 12th of June low) to be completed, 2-3 weeks lower should follow.


TRADING
Trading cycle - the trigger switched to buy with price and RSI crossing above the MAs. The problem is, as explained above, none of the tools show support for this buy. The trigger produces false signals in sideways patterns like flat or a triangle and this are the suspected patterns mentioned above. Now is waiting for the situation to be resolved.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I was watching for c wave to complete a flat. So far it works and now waiting for confirmation for reversal or not.
If we do not see reversal possible pattern is bigger flat(yellow) and the weaker indexes DJI,NYSE,RUT completing triangle.


Intermediate term - it looks like a correction is running and currently wave b. Wave c lower should follow to one of the support levels and Fibo retracement.


Long term - I have the feeling the bull market from 2009 is over. I was expecting an ugly sideways correction for at least a decade, it seems it has began in 2018 and so far it did not disappoint.
One leg was completed in March 2020 and now X or B running.... the cycles create really nice echo(the circles) which is only confusing where the major high is.
If Jan.2018 was the high for the bull market and 4y cycle high than in October we should see the top of the second 18m cycle high and most likely X wave.
If Sep.2018 was the high for the bull market and 4y cycle high than wee should see the second 18m cycle high in 2021 and most likely B wave.
What we see currently is bad for the bulls - instead of decline for 2/V or b/B we are seeing very shallow sideways move for 20w low, which points to important high in October.


MARKET BREADTH INDICATORS
Market Breadth Indicators - the message is we are in the middle of a correction.
McClellan Oscillator - retracing after slightly oversold level.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - in the middle of the range.
Percent of Stocks above MA50 - retracing, below 75.
Fear Indicator VIX - it looks like corrective retracement with one more spike to follow.
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
Hurst cycles - another 2-3 days higher and it will look like 5w cycle high. If we see reversal on Monday than it is just 10d high and final decline into 20w low has started.


Week 15 for the 20w cycle. It will be strange if it is already behind us at week 12 or 14.