May 23, 2020

Weekly preview

One day fireworks and four days nothing this is not trending move just part of a bigger pattern. The problem is the pattern is still a guess - different indexes look different, cash and futures are not in sync, it is a mess at the moment. Waiting to see completed pattern.
Overall we had daily cycle low and now the next daily cycle made a higher high as expected. At least cycles keep us on the right side:) Now it is higher until this daily cycle makes a top and reverses lower. If I am right it will be left translated and fail to rally turning lower into June for the 4y cycle low.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - you can count impulse and reversal(red), but for some indexes this does not work. I am skeptical about this, when you are trying to find a pattern it is just not there. When a pattern is completed you just see it.
With continuation higher there is two options - b/B for a flat or z wave... or even 3/C of a big ED. Guessing continues and waiting patiently for the moment.
If I have to choose it is wave z to around 3050.


Intermediate term - the indicators look ripe for reversal RSI/MACD with divergence, MA200 almost tested, price trapped between MA50 and MA200. Waiting to see what happens next.


Long term - the same now the indicators have the right look for reversal - the histogram moved above zero and RSI touched the trend line what I wrote 2-3 weeks ago.
Resistance/MA50/62% is being tested, now we should see a leg lower to complete the correction.


MARKET BREADTH INDICATORS
Market Breadth Indicators - first signs for a trouble, the indicators are not following higher and some with divergences.
McClellan Oscillator - multiple short term divergences.
McClellan Summation Index - possible double top.
Weekly Stochastic of the Summation Index - turning lower, possible sell signal.
Bullish Percentage - double divergence.
Percent of Stocks above MA50 - strength above 75.
Fear Indicator VIX - divergence higher low.
Advance-Decline Issues - another lower high and divergence, weak pointing lower.


HURST CYCLES
Daily(trading) cycle - the signal is still buy, but the price and RSI are not showing a lot of strength. This is the expectations from the beginning that this daily cycle will fail as left translated.
I want to pay attention to something, which is very helpful for trading - every 7-10 trading days their some kind of interaction between price and M10, which could be just 1-2 sideways days for MA10 to catch up or test of the MA10 or close below it(should not be for more than a day)
I think this corresponds to 10 day Hurst cycle lasting 7-9 trading days. In the begging or the middle of the longer cycles this are good entry points to add in the direction of the trend.
The current daily cycles illustrates this very good. I see 4 such cycles for the previous daily cycle and now we have the first one for the current daily cycle. Ideally we should see down on Tuesday to touch MA10 and turn higher for a few more days.


Hurst cycles - this sharp move higher is from cycle low I doubt it is 80d low too short for that, most likely it is 40d low and the next 40d cycle running.


Week 16 for the 20w cycle. It is starting to take too long, if we do not see the high next week considering alternate option - March 20w low this corresponds to A-B pattern(green first chart)... again March is not 40w low there is no 40w cycle with length 25 weeks.

May 16, 2020

Weekly preview

Finally we have a move lower, this trading cycle was missing at least one push lower into the time frame for a daily cycle low.
The pattern is again not 100% clear. At the moment I think we will see another 2-3 days lower for daily cycle low and final move up to complete the rally from late March.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the move up looks corrective, the leader NDX is the weakest so I think we should see another low and final move up. Best guess w-x-y with y as a flat. Some see A-B-C or 1-2 I am not convinced the pattern is so bullish.


Intermediate term - RSI broke the trend line, which is the first sign that the move up is topping. If the market is topping next we should see test of the broken trend line ideally with lower high.
The big picture - the price is close to MA200 and it looks tired. Even if I am wrong it needs to cool off before breaking above MA200. So we should see something lower even if it is only corrective.


Long term - Resistance/MA50/62% is being tested, after that we should see a leg lower to complete the correction.


MARKET BREADTH INDICATORS
Market Breadth Indicators - sell signals, but probably we will see one final weak push higher. Despite the strong move up from the March low, indicators like Bullish Percentage,Percent of Stocks above MA50,Advance-Decline Issues are behaving like this is corrective leg. This is not good news for the market - according this indicators we should see lower low.
McClellan Oscillator - weak, does not buying this two days rally.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - reached overbought level, trying to turn lower.
Bullish Percentage - very weak, obviously only a few stocks make the index look strong.
Percent of Stocks above MA50 - bearish behavior staying below 75, probably divergence when we see stocks higher.
Fear Indicator VIX - second leg higher expected with lower high.
Advance-Decline Issues - weak, continues with lower highs.


HURST CYCLES
Daily(trading) cycle - sell signal, price is testing MA10, RSI below MA18 - nothing to suggest reversal higher. Now it is in the time window for a low and it is right translated so we should see a low soon and a rally higher.


Hurst cycles - 40d cycle low probably early May. I am watching my trading cycle above and think about the cycle theory later.


Week 15 for the 20w cycle. If my count is right we should see 20w cycle high soon and sharp turn lower.