Nov 17, 2016
Update
We have now five waves from the low and 5 waves for the fifth wave with divergences. It is time for a pullback. Target MA200 and the congestion zone around 2145.
We have 5 waves higher for the RUT too hitting the upper trend line. MACD and RSI vertically higher and far above MA50. This means to expect pullback, but no plunge lower. The high should be tested
Similar to the major indexes there is too options - simple impulse from February(red) or it is a little bit ugly expanding wedge(green). When we see the move lower we will know - if it is an impulse expect lower high(red), if it is a corrective move expect zig-zag for a wedge (green).
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Hi Krasi, on your weekly update of October 22nd, on the intermediate term chart you said "waiting to see what pattern we have and to pinpoint the 40 week cycle low. The indexes should "attack" the ATH one more time before a move lower for a few months. " I was curious what factor changed to make you change your mind that this is not what is happening now?
ReplyDeleteThank you for your updates, love your work!
In fact this is the right pattern - the indexes will make ATH and than correct lower for a few months. So I have not changed my mind. As I wrote last week the long term pattern has not changed.
DeleteThe move from the August high lasted for too long and the 40 week cycle is unusually long so I thought the important low(40 week cycle low) was in September and the current move higher should be weaker.
The price action is showing something else so I changed my view about the intermediate term pattern that after all it will make a new ATH before a bigger move lower.
Thank you Krasi for all the quality analysis you share.
ReplyDeleteDear Krasi, I am looking at Russell 2000 which looks like a 9 sell on Tom Demark but looks like 1 giant wave from the low last week (almost 200pts on the futures) and wondering what happens if it reaches your 1333 target tomorrow? (I believe that was your target for wave 5) It seems very unhealthy to my inexperienced mind... are we to expect 4 more waves from this level? if so what retracement for wave 2?; or is this the biggest fakeout we've ever seen? (longest candle on weekly and monthly I've been able to find in history)... Basically I am just curious how you would trade this given you think we just topped out on the S&P for the short term...they are both broad U.S. indices afterall. Thank you in advance for your time... i need to find a good EWAVE book
ReplyDeleteI have posted chart to be more clear about RUT. 1333 is not the target above that level simple impulse from February will be invalidated(red on the chart).
DeleteYes 9 sell setup has been finished yesterday so time for a pause and a pullback.
This book is good and simple - The Basics of the Elliott Wave Principle R.Prechter https://www.amazon.com/Basics-Elliott-Wave-Principle/dp/0932750419
You can find it on Internet as pdf. There is good tutorials on youtube too.
Krasi,
ReplyDeleteWhat is your trading method? Do you trade daily or weekly? How do you keep from letting emotions cloud your judgement?
Kali
Combination of EW cycles and TA. Since this year I am looking for trades which will last for weeks. I do not have time for a trades lasting a few days. It costs too much time and energy, lower profits, lower success rate. Caveat you need bigger account 30k or more.
DeleteEmotions are the most difficult part of trading. You know that they are a problem and despite that you can not control them. There is no recipe it is individual thing and everyone have to find a way to overcome them.
I had problems for years, I had begun watching the stocks in 2007 and only in the last 1-2 years is ok.... it lasted 8 years. This was the reason to start the blog in the first place.
Before that reading blogs, articles, discussing all the time, trying to explain why some one is wrong and I am right... a lot of emotions:) useless, waste of time.
I just do not care any more... it happened gradually in the last 1-2 years. I suppose because I am a family guy now with a baby and I do not have time and energy:)
The first step is to reduce to minimum useless articles/analysis/blogs(90% are in this category) and concentrate on charts. Find the guys which really know what they are talking about and watch for ideas.
I noticed too that watching the market too often creates a impulse to act despite all evidence to the contrary. Limiting exposure to market news and noise definitely is good advice. I think I will also move to trading bigger trends instead of daily moves. Too much stress and energy.
DeleteThanks for your advice.
Kali
I will advice you to trade longer time frames and smaller positions.
DeleteFirst watching the charts too often, trying to analyze all the time and you start seeing things which are not there.
Second trading smaller positions and you are concentrating on doing it right and not on profits/loses so less emotions.
Forget about chasing big profits they just distract you. It is better for 1-2 years to learn to trade right than chasing for years the big money doing it the wrong way.