May 26, 2018

Weekly preview

Short term view - more of the same then final push higher and reversal.
Intermediate term view - too many options the best for me is a triangle.

Another sideway week... the pattern looks like some b wave. I do not think it is small degree wave iv from an impulse lasting two weeks is way too long.
I doubt it is wave 2 market breadth and the indicators do not support wave 3. So sticking to the plan wave D of a triangle or alternate if we see deeper push lower to support it is possible that this is wave 4 of a diagonal.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - shallow pullback lasting for so long is most of the time some connecting wave x/b. The first leg up from the April low consists of two zig-zags. The leg lower consists again of two zig-zags. From the May low we have one zig-zag up and connecting wave running now - the odds are higher that we will see another zig-zag up for a double zig-zag like the previous two legs.
So as long as the price stays above MA200 the 2690-2700 area I expect another zig-zag to finish wave D of a triangle - main scenario.
If we see deeper retracement to support 2670-2680 area it is possible that we have a diagonal - alternate scenario.
If the price breaks below support wave E is running already - low probability at the moment because reversal pattern is missing.


Intermediate term - I just can not see impulses all corrective waves and too many options to trade with conviction. Just waiting and preferred scenarios is wave D from a triangle.


Long term - nothing new waiting for he market to reveal it's intentions. I do not see imminent reversal and sell off.
So far the move up is very disappointing - look at the angle of ascend for the price and RSI.... the histogram is resetting close to zero and price is doing nothing. This is not bullish price action.


MARKET BREADTH INDICATORS
Market Breadth Indicators - nothing impressive, in the middle of the range.... nothing bullish, nothing bearish.
McClellan Oscillator - series of lower highs and moving lower close to the zero line.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal in overbought territory.
Bullish Percentage - in the middle of the range.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - complacency again I doubt that the indexes will rally higher.
Advance-Decline Issues - series of lower highs.


HURST CYCLES
Day 39 of the 40 day cycle - I think it made a top and now we are waiting for the low.


Week 15 from the last important low in February. If we have a triangle expect 20w/40w/18 month cycle low when it is finished and I will revert to my initial count.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
The setup could not be finished, it was negated at day 8. This is another signs for weakness and I doubt we have an impulse.
The histogram on the daily is resetting lower, but the price moves sideways - not a bearish price action. Most likely we will see a few more days to finish corrective pattern and a move higher.

May 19, 2018

Update

I was very busy this week and I am tired so just a short update... it does not happened anything anyway. It is basically the same like the last two posts.

We have a sideway move in a tight range for several days which does not favor neither of both triangle scenarios from the previous post. It is very unlikely that this is small wave iv(white labels previous chart) running 4-5 days so the impulse is dead for me. I did not believe in finished triangle anyway because the daily RSI shows a move has begun in early April and it is still running so the white triangle is dead for me. Now to focus what could it be.

We have a move which begun early April and it is obviously corrective so the both alive scenarios are wave D of a triangle or diagonal.
In the first case the price should start moving lower quickly and break below the support area then test it and drop again.
In the case of a diagonal we should see another choppy move lower correcting 50% and testing the support area for wave 4 of the diagonal.
I have shown this scenario as alternate option last week and with this "doing nothing" whole week the probability is rising rapidly.

May 16, 2018

Update

Here is how the triangle pattern should look like. Many think that the triangle is finished than we should see two more highs for finished impulse wave 1 of V(white labels). I am not a big fan of this scenario. The triangle which I follow is the yellow one in this case we should see a drop lower for w3 of a of E. The move from the top is an impulse for me and the white triangle(E) has low probability.... who knows it could be even something completely different than a triangle.