Sep 20, 2016
Update
In the previous post I wrote that we should expect a move lower and 40 week cycle low. It looks like this scenario is playing out so no need to change it. I was a little bit too late for the short term, but for the intermediate term it is just getting interesting.
The move lower should not last very long, after it is finished expect the high to be tested. The short term pattern is not clear and volatility is expected (FOMC tomorrow) so it is a guessing game. I will wait to see how a bottom will look like (impulse or correction) than we will know what to expect from the next 40 week cycle - higher high or lower high.
Do not get too bullish, the next bigger move should be lower.... no matter lower or higher high.
P.S. On the charts is shown bearish path this way my long term forecast makes sense. If you are bullish long term(2017) you want to see more to the downside and lower high. With higher high the pattern from 02.2016 will look like finished ED and the bulls do not want to see this.
Short term - only three waves down/up and volatility expected tomorrow there is too many options. What we know - the line in the sand is the same from last post 2160 and the move from the low(the big red candle) is choppy overlapping. So as long as the price stays below 2160 we should see one more lower low.
I think we have small M pattern(double top the second vertical line) and the second 40 day cycle is running. Now I am expecting 40 day/20 week/40 week cycle low around the end of September. Than we should see similar pattern on bigger scale and the second 40 week cycle should turn lower for several months.
The intermediate term if you zoom out (the bullish case). Even if I am wrong and we see higher high for finished ED(the bearish case) the next big move is lower.
What do u think about dax-index? It has been very strong few days now and sp500 has not gone anywhere. Has dax found bottom already?
ReplyDeleteThe move higher is not very convincing. I would wait for higher low or lower low with divergences.
DeleteThe same story with the DAX - short term is not very clear, intermediate term the next big move is lower.
It is not clear because from the top 7-8 September there is impulse lower which means usually to expect more to the downside, but it could be wave "c" from flat correction to finish 4 and than one final higher high for 5.
Ok. Thank you for the reply.
ReplyDeleteKrasi,
ReplyDeleteLooks like Ew pattern working out nicely on Nasdaq chart. What do you think?
-kali
Sorry for being so vague. To clarify, Ew pattern on Nasdaq suggest a possible wave 5. Could this be the final run before down turn for end of sept low?
DeleteThanks again Krasi,
Kali
Yes,5 waves for Nasdaq 1-2 days to be finished the impulse than pullback for a few days into the end of September.
DeleteAlways appreciate your input.
DeleteKali
Hi Krasi, I was just wondering what you think happens short term, now that we have crossed the line in the sand?
ReplyDeleteI think the indexes will squeeze a few points higher for 1-2 days to finish the current move higher than we should see a pullback lower. Nasdaq is finishing impulse and SP500/DJ will hit resistance MA50 on the daily chart. After that it is more likely to see something higher, but first to see the current move and eventual pullback.
Delete