Feb 13, 2013

Short term update

UPDATE 15.02: Closed DAX short at 7615 positive divergence at support with 5 waves lower. Now all indexes point short term higher.

UPDATE: DAX trade ok, the SP500 bounced of support and EMA50 on the hourly chart ~1514 and now looks bullish again:))) only break bellow 1514 will trigger something bearish. Obviously it is a better idea to short weakness and this is Europe at the moment.

UPDATE 14.02: DAX has plunged hard only for few minutes, I have managed to jump on the train in the last moment. The charts look now bearish, for the USA indexes too....

UPDATE: I think false alarm again and closed for 10 points profit. SP500 and DJ pointing short term higher again.For three days the trend line moved higher and now is around 1530.

UPDATE: short DAX at 7715... there is no confirmation but I will take the risk:) five waves lower and three waves up...

Ok three days later SP500 reached its target 1525, Russell 2000 reached its target for the measured move ~919, DAX reached its target for the correction A=C at 7730. Now its getting interesting - are we going to see at last some kind of weakness.


  1. Krasi, could this be the time where no correction occurs since central banks have the markets under a strong bid? It's been three weeks since Demark's combo 13 completed on the weekly chart. Many say that a pullback will be very shallow (1-2%) so max drop is around 1500 and then back up to new highs again. Have you seen such market bullishness before? Pundits are talking 1600 and possibly 1700 this year.

    1. I do not think that there is times where no correction occurs, because the big guys can not make money.
      Watching the indicators I think the same that the first drop will be fast 6-8 days and shallow normal pullbacks are 3%-4% and it will be bought. I will change the charts this weekend. The subsequent high will make divergences and will be followed by a bigger drop 8%-10% at least.
      If we see 1600 it will be first after such correction of 8%-10%.
      The bullishness is more in time and sentiment and not in price. I am working now on a new post the charts since 2000 with every swing as time and price an comparing them to see if there is some pattern... for now I can say the moves are not so random as I thought, but it is a lot of work and I need more time.
      So what I have seen till now - bullish moves are the moves from the 18M cycle lows in 2009/2010/2011 - they were long in time and the price rose more than 20%. The move now is just reaching the average size 13%-15% but it is long in time so everybody are now bullish.

    2. Thanks for your good work and insights Krasi. I look forward to your new charts. The RUT has been on a tear lately. Wondering when it will turn. I would like to enter a position on TZA. Do you think we'll make new highs after an initial shallow pullback or do we make lower highs? Take care.

    3. I am asking myself the same question lower high or higher high.... It is difficult to say, on one side the 18M cycle should show its teeth soon and bring deeper correction on the other side the sentiment is very bullish and a lot of people will wait for a pullback to jump in.
      I will bet on higher high because the sentiment does not change just like that. If I am wrong I think that the lower high will almost touch the previous high(see the tops in Apr and Oct 2012) and we will have enough time to react.

  2. Krasi, it's been three weeks after Demark's Combo 13 on the Weekly chart. From your earlier posts, you mentioned that there were a couple of times back in 2003-2007 where there were no corrections at all. Could this be one of those times as well?

    1. There was always something,sometimes with delay 2-3 weeks, sometimes only flat for 2-3 weeks.
      Two times after 9 setup there was no correction but that was after 18 month cycle low and the next strong move.
      I will write this weekend that in fact we are in a correction:) the problem is we do not see it in price and there is nothing to trade. For example DJ has second red week....