Intermediate term view - final move higher in September and correction in October and first half of November.
One more week of the same crap. The market decided to extend the correction to a double zig-zag - one of the paths I have shown so no surprise. The signs point higher for the next 2-3 weeks - after a correction move higher follows, 40 day cycle low and move higher expected, oscillators on the daily chart and McClellan Oscillator are expecting move higher, the indexes moved lower to MA50 on daily chart and reversed, TomDemark one final high needed to finish a countdown on the weekly chart... I think we should see a move higher in September. The only way to count this as a bearish pattern is some kind of diagonal lower. In this case the indexes should reverse on Tuesday and plunge lower.
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - price is back above MA50 and MA200, MACD/RSI broke above the down-sloping trend line we have a new move. We need a final confirmation on Tuesday - move above the high from Friday to confirm 5 waves impulse. If we see this I think wave 5 from the June bottom is running.
Intermediate term - one final test of the trend line expected with divergences on all indicators. Preferred pattern is that the final wave of the bull market is ED and wave 1 is finishing followed by 8%-10% correction wave 2(white).
Long term - no change, cool off and reset of the indicators expected.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - the same like last week. We are in a correction for a few weeks and oscillators are pointing higher, but trend indicators need more to the downside so that they reset before the next big move higher. So higher, but limited upside potential.
McClellan Oscillator - several troughs with divergence, move higher expected.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal, but oversold levels.
Bullish Percentage - buy signal, no signs of a weakness.
Percent of Stocks above MA50 - in the middle of the range and turning higher.
Fear Indicator VIX - still at very low levels, waiting to see divergence or signs of a move higher.
Advance-Decline Issues - in the middle of the range and turning higher.
HURST CYCLES
I think we have 40 day cycle low and the next 40 day cycle is running at day 2.
Week 10 of the second 20 week cycle...
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
One final higher high to finish countdown on the weekly chart will look great:)
Hi Krasi,
ReplyDeleteFirst of all, thank you for the updates. Its been very helpful
I have two questions:
Question 1. You say in your post: I think we should see a move higher in September. By that you mean that in September the SPX will push once more above current high to finish wave5 close to 2200-2220ish? or are you saying we are going close to 2270ish.
Question 2: Do you see similar behavior for RUT and it going to 1270, then?
Thanks
--Jules
Q1 - I think the move should just hit the trend line one more time 2220-2230, but if it continue higher we are watching the Fibo measurement 2270.
DeleteQ2 - yes
Krasi,
ReplyDeleteNicely done. Very nice!
Kali
Agreed...so was Wednesday the dip?
ReplyDeleteToday we have ECB meeting, Draghi will talk which should cause volatility.
DeleteAt the moment looking at the charts I think the price will move higher before his speech and lower after that.
Than we should see a minor low I do not when today afternoon or tomorrow.
Makes sense, thank you Krasi
ReplyDeleteKrasi,
ReplyDeleteWhat would make you shift your view that iv was indeed 4 ? I noticed you did shift your waves in light of recent moves.
Thanks in advance,
Kali
To see an impulse lower.
DeleteI do not know which is the right count of lower degree at the moment. I do not focus so much on the EW count because after such long sideway move the probability of a wrong count is very high.
I am not interested either to know the exact squiggles. Trying to trade this is not really rewarding - high risk of wrong count and ridiculous profits.
I am watching TA,cycles,market breadth and waiting for the next bigger move.
Kali,
ReplyDeleteAre you implying that iv could be lower? Seems odd that RUT would be plowing forward so strong if that was the case....but maybe it's part of the trap
RUT is difficult to count. I do not have a count.
DeleteSee the new post it is possible that we see the red count and this is just 3 with 4 to follow for RUT....
Appears that way now.
Delete-Kali
Not sure, I follow here...this is just 3 with 4 to follow for RUT...what do you mean, Krasi & Kali?
DeleteIt is more liekly that the move from the June low is finished so 5 behind us and move lower has begun.
Delete