Intermediate term view - lower for 2-3 weeks than higher again for 2-3 weeks.
More of the same 5 weeks sideway move, but the indexes continue working on their pattern. Nothing new just the charts updated.
We saw one final wave higher as expected and the pattern looks now finished. We saw topping around FOMC 17.08 and second top full moon 18.08. We have leg lower and pop-up after the news as expected.... only one big red candle is missing. If the indexes start moving higher again - no clue... maybe iii of 5. Yes move lower is expected, but do not get too bearish. The 40 day cycle is bullish right translated and it has entered the time window for a low. So any move lower should be short living... it can be sharp, but should not last more than 10 trading days and the size the usual 3%-4%. Even if I am wrong we need topping process and we should see second top for some kind of a double top/M pattern. TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the pattern looks finished I expected to see a move lower.
Intermediate term - nothing new divergences and move lower expected, but I do not think that this is a major top.
Long term - nothing new, I think the indicators need time to reset before the next big move higher.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - the same like last week the indicators look bearish and correction is running already according to market breadth.
McClellan Oscillator - below zero.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - second top with divergence.
Percent of Stocks above MA50 - second top with divergence.
Fear Indicator VIX - very tight BB the volatility should shoot up in the next weeks.
Advance-Decline Issues - weakness and divergence.
NYSE New Highs-New Lows - diverging less stocks are making higher highs.
Percent of Stocks above MA200 - entering bullish mode close to 80.
HURST CYCLES
Day 38 of the 40 day cycle. We are in the time window for a bottom so any move lower should be short living and in worst case the top will be tested.
Week 8 of the second 20 week cycle.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We have combo finished and countdown at 11. No price flip so far.
Hi Krasi. Should you show me a vix chart,how do you see it,what do you wait from it? Thanks
ReplyDeleteYou can click on the link in the "MARKET BREADTH INDICATORS" section.
DeleteWhat I watch for:
- Levels - below 13 and staying there the market is trending higher, around 20 are pullbacks for stocks, around 28-30 corrections for stocks, and above 30 a big correction and fear in the markets.
- Tight BB means the volatility should spike soon.
- Divergences expect a move in the opposite direction.
Currently below 13 for a while the market is trending, tight BB volatility should spike soon, no divergence more likely the high for the indexes should be tested before reversal.
Short said the same message like EW and cycles.
thx Krasi the answer,and when i see good,you are waiting for only a pullback in stocks?
ReplyDeleteI do not think that the indexes will just reverse... at least a retest of the high before a bigger sell off. So the next move lower should be just a pullback.
DeleteWith vix so low and potentially 4,8, and 16 year cycle lows coming near year end, i am wondering if it has been a flat from august 2015 low setting up a deep decline for a 4th wave low from the 2008 bottom. Right hand translation and new highs above july 2015 high due to federal reserve liquidity/intervention? But in reality we are just finishing a flat and about to start deep decline? Thoughts?
ReplyDeleteVIX so low means correction. We saw many times such low levels in the last 5 years. I do not see something extraordinary.
DeleteI do not see 4/8/16 year cycle low near year end only 9 month cycle low.
Theoretically expanded flat for wave 4 is still possible. Than we will see 4/8 year cycle low, but in summer 2017 not in a few months.
I do not think that this pattern is playing out, but at the moment it can not be excluded (that is why the red line on the second chart:)
Have you got a counting vix chart?
ReplyDeleteNo I do not count waves for VIX. It does make sense for more... I do not see waves.
Delete