Intermediate term view - a few more weeks higher before we can think of a top.
The indexes moved a few points higher SP500 17 points DJIA 20 points... nothing so interesting, but nothing is information too:) First 7 trading days after the huge bar the indexes are doing practically nothing so forget about iii of 3 to the moon. This is not price action in iii of 3, you should see a pause one day max two before the indexes blasting higher and this is not happening. Second SPX500 managed to squeeze 5 waves higher and finished TomDemark setup higher. This means the move is strong enough and not to expect sudden reversal and plunge lower. This confirms the two possible scenarios wedge or huge zig-zag from the February low. TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the move looks tired so I expect a pullback to support and MA200 around 2145.
Intermediate term - the two options which make sense. Patience the market will reveal it's intentions. The indicators are pointing higher no signs to expect sudden reversal.
Pullback to MA20 and MA50 looks probable.
Long term - the indicators are pointing higher. It will last a few weeks before we see a top with divergences.
MARKET BREADTH INDICATORS
The Market Breadth Indicators - moving higher, but the strength is missing... this is what we expect to see.
McClellan Oscillator - above zero, but not really strong.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - turned up from oversold level.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - around the middle of the range.
Fear Indicator VIX - building multiple divergences for the next important top.
Advance-Decline Issues - heading higher.
HURST CYCLES
Day 10 of the 40 day cycle.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Sell setup finished the market has enough strength despite only crawling slowly higher.... there is no sellers at the moment.
ECB taper > $ and dax crashing through winter > european stocks big come back through the rest of 2017
ReplyDeleteYes, the DAX is telling the same story. I have forgotten to draw the next moves on the chart above - deep and steep retracement 3-4 months followed by strong rally.
DeleteRetracement to what level in your opinion? I dont think the low for this DAX correction, unlike the s&p, is in.
DeleteAlso, you are expecting higher low for gold and lower low for silver somewhere in the middle of 2017 right? What's your take on silver? It's interesting because silver 'should' outperform gold in the coming years. It also usually lags gold a bit so silver meltup 2018-2020? Can it blow off the 2011 top in your opinion?
Thank you for your work and greetings from Poland.
I think this is wave A for the DAX, than lower wave B to around 9200 +-100 points and than wave C higher to around 11700(the same size like the current move higher from February).
DeletePrecious metals made secular top in 2011 and since than they are in secular bear market.
In Dec.2015 they made important bottom and should move higher for 3-4 years in cyclical bull market.
I thought the USD is making a triangle and final rally will follow in 2017, which meant gold very deep retracement and silver even lower low possible(like in 2001). After the elections a triangle for the USD has very low probability accordingly lower lows for the PM.
At the moment I expect higher low in 2017(cyclical bull is running with low in Dec.2015)
When the correction is over the next leg higher until late 2018/early 2019. I expect lower highs because PM/commodities are in secular bear market. I do not expect PM to blow off above the previous highs.
So no more faith in secular trends eh? I guess we'll find out soon enough because if we get a relatively small dollar retracement and shiny stuff manages only to make a right shoulder from here...
DeleteIn the last "Long term update" I have mentioned that despite the strong rally something does not feel right. Even gold bugs are noticing now that something is "off course" - http://www.safehaven.com/article/43087/golds-2016-bull-market-moving-off-course
DeleteNow I think I know what it is "off course" - major secular bull market top in 2011.
From trading perspective it does not matter - it will move higher. Later you will make your conclusion - if after 4 years it is still below the previous highs something is really "off course" .
Hi Krasi, can you provide longer term graphs? E.g. Post top of wave 5 on around Oct 2018.
ReplyDeleteIt would be interesting to see your perspective.
As always, thanks!
Here is the chart from the last "Long term update" - https://4.bp.blogspot.com/-om3Afw9xqr4/V4IciQxVLdI/AAAAAAAAGi4/iHzmccV1Z2k743zJ4reoc5_nODnDt0u_gCLcB/s1600/lt2-1.png
Delete40%-60% lower until 2022