Nov 10, 2016
Plausible idea?
I am in the camp that the 18 month cycle is topping. I do not believe that we are in wave iii of 3 to the moon. I do not see the different indexes to support this idea - SP500 despite the strong rally it is only a-b-c from the bottom. The DAX needs to touch 11k and we will have finished wedge(diagonal 5th wave) from the bottom. Emerging markets best case are in wave 4 and rally higher for the last wave 5.
For months I am thinking that the last wave V of the bull market should be a diagonal because I do not see the impulse. We need A-B-C for wave 1 of V.
Market breadth indicators need at least 4-5 weeks to reset. So we need a move higher for several weeks, but no too bullish.... I was scratching my head for two days after this sharp move and this came out. The wave from June to August is way too short compared to the wave from February to April... and you need two impulses with similar length. The pattern below looks perfect - EW, cycles, market breadth everything fits perfect. Now everything makes sense.... I should have spotted the pattern much earlier.
Subscribe to:
Post Comments (Atom)
Thanks for the chart.
ReplyDeleteHow would this translate into S&P 500 and Nasdaq?
Thanks,
Kali
Nasdaq has already two impulses higher with the same size and it is much weaker. Sideway move some kind of a flat until the DJ and SP500 catch up.
DeleteSP500 the same picture as DJ.
Thanks for the update Krasi. Have you tried counting the futures which now look completely different than the indexes? Just curious how they factor into your analysis since they now look completely different indexes. A side note outside of TA, in my opinion the overnight session was a huge driver of this week's rally...$250 billion of notional value S&P futures traded hands from 6pm to 9am EST on Nov8-9th at a vwap of 2084. But then from 9am to 945am on Nov9th (in 45min), another $45bln was traded at a VWAP of 2125 causing a massive short squeeze, and price causes everyone to change their perspective on what a Trump victory means, while others now think this is another Brexit moment - even though it is the opposite since no additional QE is coming from this; the opposite, rates are moving way higher which is bad for valuations and highly indebted cos and the whole economy; because of the presumption of huge fiscal stimulus which will cause huge inflation, even though it is all speculation as it hasn't happened yet. Until it happens, higher rates are bad for everything except banks... and he doesn't even get inaugurated till late January, so how long can the market keep making only rosy assumptions before it's starts questioning itself. Just a thought.
ReplyDeleteMinor difference between futures and the cash indexes is ok, different pattern is no go.
DeleteThis a-b-c lower from the August top maybe look different for the futures and the indexes, but at the end is just this an a-b-c zig-zag for both. There is no difference for the wave lower and there is no difference for the bigger pattern. So there is no major difference only minor difference how exactly the zig-zag lower looks like... no contradiction.
This is interesting with the short squeeze... it could explain why market breadth is not really reacting despite the vertical move higher. One more reason not to trust this rally it does not look broad based.
When will be the bull market over? - H1-2018 this is what the charts are saying:) The reason... probably the bond market crashing(you are seeing the same reasons). In the last "Long term update" I wrote that the bond bull market is dying and we are watching live the secular top of 30 year long bull market. So far everything on track, the yields will move much higher.
Thanks Krasi!
DeleteHey Krasi!
ReplyDeleteAny update on gold ? Thank you.
Gold should move higher for two months... probably until mid January.
DeleteThe only question is when it is so close to the previous low will it make slightly lower low with divergences or not.
The USD is finishing wave D of the triangle and if it has a few more days higher gold could make lower low.
After that USD should move lower for wave E to finish the triangle and Gold higher. The cycles for both USD and GOLD point to mid January for this moves.
Krasi, What are your thoughts on Russell 2000?
ReplyDeleteNot sure about RUT... no idea.
DeleteLost so much money last time he said something like this but thought i should share
ReplyDeletehttp://etfdailynews.com/2016/11/11/analyst-after-trump-rally-ends-stocks-will-plunge-over-10/
TomDemark Sequential is a great tool, but I have seen him making so many wrong calls.
ReplyDeleteThe caveat is "once the current Trump-fueled rally fizzles". For him this is in 3 days for me at least in 3 weeks.