Jun 17, 2016

Update

Sometimes it plays out perfect - slightly higher to finish wave 4, after FOMC lower low with divergences and on top of that w5 hit the Fibonacci projection with less than 1 point deviation.

The reversal is sharp with bullish candle so the retracement should last a few days. The indexes will probably squeeze a few points higher, but we have resistance / MA50 / Fibo 50% retracement and we should see a pullback followed by another leg higher into the resistance zone. Above 2105 will look bad for the bears.

6 comments:

  1. So based on Friday action....on SPX...you see us going to 2020? what about the RUT?

    ReplyDelete
    Replies
    1. Minimum it is an a-b-c correction one more leg lower to around 1100 and if the pattern is expanded flat like SPX500 the measurement is lower to around 1070. If you look at the chart you will see a "congestion zone" at this levels which is a support area. And if you look at the Fibonacci retracement this is the 38,2%-50% area.
      Watch 1070-1100 too many "coincidences" around this area.

      Delete
  2. Thanks Krasi...So you think we can retrace that deep within one week though or more like two weeks time frame? that feels more like a crash....Also, once we hit support there...how far do you think we rebound? Im new to this elliot wave and reading up on it.

    ReplyDelete
    Replies
    1. No it should last longer than a week. First we should see a retracement higher than lower... a few weeks.
      How high is difficult question - after a correction is finished it should continue higher with wave 3, but I expect important low September-October 40 week cycle low.
      Two options - complex correction with lower high in summer and the low of wave 2 in September-October or we have now 1-2 and i-ii of 3 developing until September-October which means higher high in summer.
      Predicting how a correction will develop in the middle of it... ends most of the time with wrong forecast. So we have to follow it step by step first to see the move lower than how it moves higher.

      Good luck with EW - advice keep it simple you do not some complex stuff only basic rules. The important things you can read for a day the rest is practice.

      Delete
  3. Im a little confused. are you on skype....? my user name is bassalej....maybe i can call you. Im trying to get an idea of the sequence....
    Here is what i undertand from your statement: Next week, we should go lower. then after that, we will go higher before we drop again. am i correct?

    ReplyDelete
    Replies
    1. With a chart is more clear - I have posted the weekly preview see the first chart.
      I do not focus so much on the short term. The pattern tells me we are in the middle of wave 2 and there should be one more leg higher before it is finished. I do not know if it will take 2-3-4 days.

      Delete