Intermediate term view - we should see topping for a few weeks followed by a move lower for several months.
Short term the market choose the move higher which I have shown last week. Despite all the "strength" this move does not look good. This is not a sustainable path, market breadth looks poor, the weekly indicators showing divergences.
Short term - this leg is near its end. I think toping should start next week and the top should be retested later - then we watch for a higher high with divergence or lower high. I do not expect a sell off in December. Intermediate term - it is either crappy wave 1 of V or wave 5 of III(no idea how to count is as an impulse except ugly diagonal) or the indexes are still in wave IV and this is B of it. Other options with lower probability - wave 1 of ED for V, this is the final top wave V of the bull market or this is wave 3 of V higher is running. So thank you for the shitty analysis and that crap EW:))) Not so fast - focus on trading not analysis. Instead of trying to guess the pattern it is better to look at the message and it is in 5 of 6 cases expect serious move lower and one bullish scenario just because the market has two directions and for which I do not see any evidence. Add to this that we have indicators with divergences on the weekly chart and market breadth with triple divergences what you want to see around important top. So what are the odds that after a top we will see a move lower for months and 10% correction?
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - it looks to me like finished 5 waves from the bottom.
Intermediate term - vertical move this is not sustainable the indexes are heading for important top. They will not just reverse and plunge, the top will be tested then a move lower for a few months should begin.
Long term - I switched to SP500 chart for a consistent view. I think we will see a deep correction then the final mania phase of the bull market.
Many patterns one outcome correction and then higher - wave 5 of III(red), B of IV(green), 1 of V(yellow).
MARKET BREADTH INDICATORS
The Market Breadth Indicators - too weak with divergences for such "powerful" move. I think the indexes are headed for an important top.
McClellan Oscillator - second top and turned lower.
McClellan Summation Index - buy signal, long term divergence.
Weekly Stochastic of the Summation Index - buy signal
Bullish Percentage - buy signal, long term divergence.
Percent of Stocks above MA50 - buy signal, long term divergence.
Fear Indicator VIX - divergence.
Advance-Decline Issues - weak could not move to overbought territory.
HURST CYCLES
Day 24 of the 40 day cycle.
Week 5 of the 20 week cycle. I think in a few weeks we should see a 20 week/40 week/18 month cycle top.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Combo at 12 and countdown at 11. Next week they should be finished.
Indexes which look like a diagonal NASDAQ and DAX not like the crap SP500:)
Krasi,
ReplyDeleteThis market looks to be topping but still incredibly strong. Any thoughts?
Kali
Yes it is topping, this is small v of 5 with divergences and VIX higher although we see 20 points higher.
DeleteVolume suggest buying climax for last few trading days as well. It would be very surprising if we don't get sell the news event after the fed.
DeleteRecent strength really surprising.
-Kali
Top is in guys.
ReplyDeletewhy precious metal hit lower again? What does it mean? Thanks.
ReplyDeleteBecause the correction is not over. This is not a surprise, surprise is that gold is drifting lower and Silver bounced a few weeks ago as it was expected from the pattern.
DeleteIt means that with higher probability PM are in cyclical bull market for a few years as I have wrote a few times and not in mega bull market to the moon.
There is no signs for a switch from "risk on" trade(stocks) to "risk off" trade(bonds,PM).
First we should see a counter trend move(for all stocks/bonds/PM) then one more move in the direction of the trend. After that expect intermediate term bottoms/top and the trade reversing.
On your post on Nov 25, you mentioned next move should be some bounce back, feel bad that even that small bounce didn't happen, is there some reason? Thanks.
DeleteNo idea... as you can see Silver bounced Gold not. For such short living counter trend bounces you have no chance to say how it will play out.
DeleteDo not trade them very high risk very small reward and they can end abruptly with a gap in the direction of the trend leaving you with no chance to react.
Hi Krasi,
ReplyDeleteAt what level you see Gold bottoming?
Thanks
Neel
I am not sure for the pattern so I do not know. Short term bottom is imminent, I will not be surprised to see it today, but there is know signs so far that this is THE bottom for the correction. It will be tested so no need to guess. Small speculative position is ok.
Delete