May 25, 2016
Update
I am such an idiot... I could not connect the dots between "we have the minimum for 20 week cycle low" and "it feels more like the first leg of a corrective move". I was expecting a move higher, but this 30 points yesterday(too much strength) confirm that we have 20 week cycle low behind us and I have to adjust the intermediate term path. It is not some drastic change, but it is a stupid mistake.
Now with 20 week cycle low behind us we should see a few weeks higher. I think this will be wave B(red) and the move should be corrective. So far we have only two legs higher with the same size. If I am wrong the bulls must prove it and continue pushing higher for an impulse(green).
Resistance is around 2085 and support around 2050. Any move lower should stay above 2050 to confirm my forecast.
And on the daily chart how it should look like. I suspect dominant 40 week cycle, the second 20 week cycle running higher making M pattern and lower into the September-October period for 40 week cycle low.
The oscillators are saying there is more to the upside, RSI broke the trend line which means we have a new move not part of the decline from April.
As a reminder the article A May-November Relationship from Tom McClellan. I should read what I am posting:) Notice the dates and 21.05 was a full moon... just a coincidence.
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So you see a better entry point next week - midweek - if I am reading your chart correctly, correct?
ReplyDeleteYes, I think there will be a better entry point.
DeleteAt the moment there is 3 waves and there is no chance to predict what will happen before to see the next move...
- if this is 1-2-3 than lower to 2080 for w4 and higher to 2110 for w5
- or it is just a-b-c and will reverse for a bigger pullback.
It depends on the time frame you are interested in and if 30-40 points are interesting for you.
I'm usually a one to two week swing trader. But I also have some long-term money for my retirement accounts that I manage for other people.
DeleteThan I would not chase this move. I am in the camp that this is just corrective move for a few weeks. Wait for a better entry next week for a swing trade.
DeleteI'm kicking myself too. I was on the computer and ready to pull the trigger on a long trade mid-day last Thursday on weakness. I thought that the market needed a little more fear or bad news to shift the sentiment. You learn to let it go.
ReplyDeleteOpportunities come and go all the time... I was angry at me that I did connect the different pieces of information.
DeleteHi Krasi,
ReplyDeleteThanks for great work. What chart program do you use? Thanks
- Kali
Free charts on Internet - http://www.freestockcharts.com/
DeleteHi Krasi,
ReplyDeleteJust curiosity. Why would the current wave not be beginning of a 3rd leg in Elliot Wave pattern?
- Kali
Shallow 23,6% retracement, no fear a few consecutive days sell off, market breadth not even close to oversold levels to signal important low.... this is the description of wave 4 not wave 2.
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