Apr 16, 2013

Short term update

Here we go again.... the same story about huge bars is valid for the down side too. The bar today retraced more than 50% of the previous day and closed at the high for the day. That is suspicious... Shorts closed. Short term - reversal after reversal, no divergences, no pullbacks... just up and down. I do not know about you, but I am getting very tired already.

One bullish scenario - the whole mess in the middle looks like perfect expanding flat X wave and we saw already A-B of Y and the last wave C up has begun today. Measures where A=C and W=Y point to something between 1610 and 1620. Until the trend line or the low at B around 1550 is broken it is worth to keep an eye on this scenario.


  1. Krasi, this market has been whipsaw-city! Is this a function of the central bankers manipulating this market? What do you think about the plunge in the precious metals? looking at the gold chart, would you recommend a long entry into GLD or SLV? Thanks for your wonderful blog and for posting your trading system signals in a timely manner. I always check your blog each day before making a trade.

  2. Such whipsaws are normal for a topping process, but this time we have too many reversals. If you look at other tops there is 2-3 days in one direction and now up-down-up-down and the last two days 30 points down an than 22 up....
    Gold - I do not think that the secular bull is over. Commodities market have a little bit different dynamic, but the psychology is the following(human beings react always the same way):
    - First such violent moves appear near to the end of a move not the beginning(there is no more sellers).
    - Second such violent moves cause a snap back move to normal and now we have market breadth indicators at 0 for the gold.
    - Third the "scary" move is usually not the bottom it is tested one more time - higher low or lower low with divergence.

    I would say expect some kind of a snap back rally, test of the low(it could be lower low) and resume of the bull market. Just to say I do not follow the commodities very close... pure psychology.