Jun 23, 2016

Update

The move higher lasts too long and I think we have different pattern. I have this suspicion since two days, but I wanted to update the charts tomorrow when the volatility is behind us for more accurate charts.

I post them now so that you know roughly how the idea looks like (I receive questions what is going on) maybe it is better this way and I will adjust the charts if we have too much volatility.
The DAX is finishing impulse higher and correction lower is expected. EUR/USD is finishing zig-zag higher and should reverse. The signs are for a sell the news event, but not sell off.

The only chance I see for the expanded flat to play out is a surprise "Leave EU" today than we can see a sell off to 2000.

8 comments:

  1. Question: I refer to marscapital's dario's latest post. He's got the same idea.. as in same direction, but his count is different from yours as it goes slightly lower at 1965.

    How can we determine whether or not we can go lower when we're at 2025?

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    1. He is counting the last high as wave 5 from the February bottom and of course something like 50% retracement is expected. I think this is a wrong count and this is just wave B of a triangle.

      In a triangle we should see a leg lower with the same size like the previous one something like 2035-2045. If this is wrong than it should be some wave 3 and just move below 2025 after a short pause a few hours.

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  2. thanks Krasi & Ellis. Do you mind showing the same chart for the RUT?

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    1. RUT is the only index which looks a little bit different and I am not sure how to count it. At the moment I can not give reasonable forecast it will be guessing. If I have to guess I would say for a correction you need at least two legs lower so it should correct in the next weeks like the other indexes than you watch the support/resistance levels and Fibo levels (I have shown them last week).

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  3. it is now at 2122. Thoughts?

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    1. As always before a news the price is pushed in one direction and than move in the opposite direction follows. That is the way it works.
      The market made higher high and it was not pricing in "Leave".... waiting for the dust to settle down a little bit and see what it could be.
      First thoughts it is expanded flat -> wave X higher to follow -> another zig-zag lower.

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  4. Futures close limit down at 1999. Great call Krasi! What an about face vs market close!!

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    Replies
    1. It was an easy call that the correction is not over the bottom will come with the 40 week cycle low and the time window opens in mid-August. Now the problem is to find the right pattern and this is not easy with corrections:)
      Yes the futures made higher high, but the cash market not... at first glance I think it is the same pattern... a little bit different, but I think it is the same expanded flat.
      I will post a chart.

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