Oct 21, 2017

Weekly preview

Short term view - higher for a day or two to finish wave 3 from the August low.
Intermediate term view - heading higher for the top of wave 3 from the Feb.2016 low.

The ED broke lower, but only for a day which means it was a move from a minor degree and my short term pattern was wrong. The big picture has not changed much - the indexes are heading higher for the top of waves 3 from the Aug.2007 and Feb.2016 lows.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - a lot of room for speculation... on the chart is the count which I was following so far with the internal waves adjusted. Alternate we could see two more highs not only one( the green label). When we see the next low we will know more. For more bullish count it should stay above 2540-2545(the green circle) for the current count it should drop deeper to around 2525.
According to the theory the maximum extension for wave 3 is 4,236 and this is around 2588.


Intermediate term - I was asked about timing the next important lows are 40 week cycle low in the next 6-10 weeks and 18 month cycle low in Q2 May/June(if wee see average cycle length). Adjusted the chart for time... sudden deep sell off does fit much, retracing time looks more likely. In 1993/1994 and 2006/2007 when the VIX stayed below 10 for while the outcome was short living plunge 7%-8%. So finishing the wave higher and similar correction to support/MA200 for 40 week cycle low looks better, after that the indexes should burn time - either this is the top of iii of 3 and they burn time with waves iv/v of 3 and 4, or wave 4 will be time consuming some complex double zig-zag or triangle.


Long term - no change, waiting for the top of the current leg higher then one more correction and a rally before the end of the bull market.
For those who think that the indexes will continue higher should look at the weekly chart and RSI. It is more likely the indexes to hit the trend line and correct than to continue higher.... so far since 2009 we have not seen exception.


MARKET BREADTH INDICATORS
Market Breadth Indicators - look "surprisingly" weak given the new ATH which we see.... some are trying to turn lower, but it is too early to talk about confirmed sell signal. We are seeing peek complacency I think from now on VIX will make only higher lows.
McClellan Oscillator - below zero.
McClellan Summation Index - sell signal, but just crossed the signal line.
Weekly Stochastic of the Summation Index - just turned lower, but close to overbought levels too early gain.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - a few points above the 75 level.
Fear Indicator VIX - short term divergences with very very tight BB.
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
Day 44... I do not know if this intraday low should be counted as a cycle low or not. RUT for example makes very nice wave 4 and cycle low at day 44. I think it is more likely to see a longer cycle and we have not seen the low yet for the current 40 day cycle.


Week 9 of the 20 week cycle.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We have now finished combo and countdown on the daily chart and week 8 of a sell setup on the weekly chart.

Oct 14, 2017

Weekly preview

Short term view - pullback and one more high.
Intermediate term view - several weeks for the current move up to be finished and correction to around 2420.

The indexes squeezed a few points higher as expected, but it is lasting whole week.... they are moving soooooo slowly. The same story waiting for a pullback and one more high.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the pattern looks like ED, MACD/RSI with divergences... waiting to see reversal for the expected pullback.


Intermediate term - waiting another 2-3 weeks before the current move up is finished. The high should be either the top of iii of 3 or 3 from the Feb.2016 low.


Long term - no change, waiting for the top of the current leg higher then one more correction and a rally before the end of the bull market. Momentum is still pointing up.


MARKET BREADTH INDICATORS
Market Breadth Indicators - the same like last week - positive, pointing higher, only the McClellan Oscillator is sending warning message... probably because of the expected pullback.
McClellan Oscillator - with multiple divergences and around zero. I think we will see oversold level around 60 with the pullback and bigger intermediate term divergences with the intermediate term top for the indexes.
McClellan Summation Index - buy signal and erased some divergences.
Weekly Stochastic of the Summation Index - buy signal, in overbought territory.
Bullish Percentage - still buy signal, but turning lower with double divergence.
Percent of Stocks above MA50 - no change around overbought level, but showing weakness.
Fear Indicator VIX - extreme complacency and extreme tight BB again, pop-up is around the corner.
Advance-Decline Issues - cumulative A/D still making higher highs.


HURST CYCLES
Day 39 of the 40 day cycle. The expected pullback should be 40 day cycle low.


Week 8 of the 20 week cycle.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Combo at 13 and countdown at 10. Probably the finished combo marks a top then a pullback and the final high with finished countdown. On the weekly chart we have sell setup at 7 the odds are very good to see finished setup.

Oct 8, 2017

Weekly preview

Short term view - pullback and one more high.
Intermediate term view - several weeks for the current move up to be finished and correction to around 2420.

I thought we will see a day or two higher to around 2525 and pullback, instead we saw extended wave. I do not know a way to predict if extended wave will appear or not, it is a rare event. The pattern has not changed and the analysis is the same.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the Fibo target for extended wave v of 3 is 2568 so probably we will see one more high before a pullback. As long as we do not see impulsive reversal below 2510 I expect just a pullback and one more high.


Intermediate term - almost every analysis I read expects important top in EW terms wave 3 with the April low as wave iv of 3. The problem is the move from the August low does not fit in the pattern.... so keep in mind that this could be just the top of wave iii of 3. The next decline will show what is going on. If it is wave iv expect a low around 2420 if it is wave 4 it should move below 2350.


Long term - no change, waiting for the top of the current leg higher then one more correction and a rally before the end of the bull market. Momentum is pointing up but building double divergences.


MARKET BREADTH INDICATORS
Market Breadth Indicators - positive, pointing higher, only the McClellan Oscillator with short term divergences and around zero. VIX and other sentiment indicators showing EXTREME complacency. Such conditions always end in the same way - sharp correction to burn the greedy traders.
McClellan Oscillator - with divergences and around zero. I think we will see oversold level around 60 with the pullback and bigger intermediate term divergences with the intermediate term top for the indexes.
McClellan Summation Index - buy signal and erased some divergences.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal... with double divergence.
Percent of Stocks above MA50 - managed to reach overbought level, but overall weak.
Fear Indicator VIX - EXTREME complacency.

HURST CYCLES
Day 34 of the 40 day cycle. The expected pullback should be 40 day cycle low.


Week 7 of the 20 week cycle. The pullback should be half cycle low week 8 or 9.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Combo at 11 and countdown at 8. I think they will be finished with the expected one more high.
On the weekly chart we have sell setup at 6 the odds are very good to see finished setup too.