Jun 27, 2016

Update

The bears delivered the follow through... the pattern is the same we are in wave 3, but I admit, I am surprised from the strength. I suspect this is because we will see more important low as I thought till now(see below).
We are in wave 3 and we need series of 4-5 4-5 to finish the impulse C. At the moment it looks like it will finish around 1960 - 50% Fibo retracement.

This is important chart I think bonds are heading for MAJOR high so careful with bonds(more in two weeks in long term update). Check the dates of the highs - the indexes are making important lows when TLT is making important highs. With a lot of fear now, the correction heading for 50% Fibo retracement, and if I am right bonds with important high - it starts looking like intermediate term low wave 2 for the stock indexes.

12 comments:

  1. Hi Krasi,
    You mentioned that.. For your intermediate term, the correction begun two months ago and it has more to go at least until September for June 25 post.

    Does that mean we will see another correction to 1960 in september after a price discovery at 2080+? If yes what's the basis?

    What comes after wave c is a new impulse wave 1 isn't it?

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    1. I am wondering two days already is this wave 2 bottom and the correction is over or not.
      The signs are pointing rather to a low later in October. The problem is we can not be 100% sure until we see how a move higher looks like.
      Yes after finished correction another leg higher begins, but it could be a X wave for a complex correction combination... or I am wrong and this is wave A of a zig-zag.

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    2. How about it has been a truncated wave 5 and is followed by a ending diagonal (which is where we are now)?

      What it implies in this alternative is an upwards explosion.

      I still dun get the answer to my qn: what is your technical basis for thinking of a low in Oct?

      Much appreciated tq!

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  2. Market breadth, indicators, cycles does not look right for an important low and explosion higher.
    - The indicators are just pointing lower no signs of a bottom
    - we have only 2 days sell off and market breadth does not really retraced to recharge for wave 3 McClellan Summation Index is at very elevated levels for wave 3 to begin, A/D cumulative no retracement at all
    - cycles - low for wave 2 now will mean higher low in October for bullish 40 week bullish 1-2 i-ii count. I have looked at such occasions and it is higher 2-4 weeks correction 20 week cycle low and higher again but not double top a lot higher and another correction 2-4 weeks. We have almost 10 weeks sideway move this is not really bullish behavior - the probability is higher that the 40 week cycle is dominant and it will make lower low.

    I do not see conditions for explosion - retracement to 2080-2100 yes(you mean this if understand right the idea with the ED) but not really for wave 3.

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  3. Are we at wave 4 of the green count at this time of the post? Thks!

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    1. If the indexes reverse today yes. If they continue higher and overlap with w1, we start looking for another pattern.
      Patience let the move play out. After such "panic" moves usually there is a second low - now I just watch and wait for higher low or lower low with divergence.

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  4. Hi Krasi, appreciate your detailed respond. Can i confirm with you that the replies above, you mentioned w1 is refer to the top of the hourly chart? Thank you.

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    1. Yes, from the chart above. Above 2050 is very bad for bears.... I doubt already that this is w4. The DAX looks bullish for the next days it will try to close the gap something like 9800-9900. I have no idea what the pattern is if this not w4... I am just waiting at the moment.

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    2. Yes, it is bullish right now. Maybe we can wait and see the market of DAX able to close above 9800? If sp, the bear will be temporary gone? I think.

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    3. Above 2050 and the bears will be squeezed.
      In such environment with "panic" moves there is always a lot of whipsaws. Either you day trade or wait for a second low and more clear pattern.
      When I do not have an edge and do not know what is going on.... I wait. Trading is not about knowing the future and every twist and turn.

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  5. Hi Krasi,

    I think the rapid downward move could be the "C" and the current move is likely wave 1 of the bull run. What do you think?

    - Kali

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    1. Yes the indexes are finished with the move lower.... but I am not convinced that this is the beginning of the next bull run wave 3.... it does not feel right see the 4th comment.

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