Oct 21, 2017

Weekly preview

Short term view - higher for a day or two to finish wave 3 from the August low.
Intermediate term view - heading higher for the top of wave 3 from the Feb.2016 low.

The ED broke lower, but only for a day which means it was a move from a minor degree and my short term pattern was wrong. The big picture has not changed much - the indexes are heading higher for the top of waves 3 from the Aug.2007 and Feb.2016 lows.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - a lot of room for speculation... on the chart is the count which I was following so far with the internal waves adjusted. Alternate we could see two more highs not only one( the green label). When we see the next low we will know more. For more bullish count it should stay above 2540-2545(the green circle) for the current count it should drop deeper to around 2525.
According to the theory the maximum extension for wave 3 is 4,236 and this is around 2588.


Intermediate term - I was asked about timing the next important lows are 40 week cycle low in the next 6-10 weeks and 18 month cycle low in Q2 May/June(if wee see average cycle length). Adjusted the chart for time... sudden deep sell off does fit much, retracing time looks more likely. In 1993/1994 and 2006/2007 when the VIX stayed below 10 for while the outcome was short living plunge 7%-8%. So finishing the wave higher and similar correction to support/MA200 for 40 week cycle low looks better, after that the indexes should burn time - either this is the top of iii of 3 and they burn time with waves iv/v of 3 and 4, or wave 4 will be time consuming some complex double zig-zag or triangle.


Long term - no change, waiting for the top of the current leg higher then one more correction and a rally before the end of the bull market.
For those who think that the indexes will continue higher should look at the weekly chart and RSI. It is more likely the indexes to hit the trend line and correct than to continue higher.... so far since 2009 we have not seen exception.


MARKET BREADTH INDICATORS
Market Breadth Indicators - look "surprisingly" weak given the new ATH which we see.... some are trying to turn lower, but it is too early to talk about confirmed sell signal. We are seeing peek complacency I think from now on VIX will make only higher lows.
McClellan Oscillator - below zero.
McClellan Summation Index - sell signal, but just crossed the signal line.
Weekly Stochastic of the Summation Index - just turned lower, but close to overbought levels too early gain.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - a few points above the 75 level.
Fear Indicator VIX - short term divergences with very very tight BB.
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
Day 44... I do not know if this intraday low should be counted as a cycle low or not. RUT for example makes very nice wave 4 and cycle low at day 44. I think it is more likely to see a longer cycle and we have not seen the low yet for the current 40 day cycle.


Week 9 of the 20 week cycle.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We have now finished combo and countdown on the daily chart and week 8 of a sell setup on the weekly chart.

Oct 14, 2017

Weekly preview

Short term view - pullback and one more high.
Intermediate term view - several weeks for the current move up to be finished and correction to around 2420.

The indexes squeezed a few points higher as expected, but it is lasting whole week.... they are moving soooooo slowly. The same story waiting for a pullback and one more high.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the pattern looks like ED, MACD/RSI with divergences... waiting to see reversal for the expected pullback.


Intermediate term - waiting another 2-3 weeks before the current move up is finished. The high should be either the top of iii of 3 or 3 from the Feb.2016 low.


Long term - no change, waiting for the top of the current leg higher then one more correction and a rally before the end of the bull market. Momentum is still pointing up.


MARKET BREADTH INDICATORS
Market Breadth Indicators - the same like last week - positive, pointing higher, only the McClellan Oscillator is sending warning message... probably because of the expected pullback.
McClellan Oscillator - with multiple divergences and around zero. I think we will see oversold level around 60 with the pullback and bigger intermediate term divergences with the intermediate term top for the indexes.
McClellan Summation Index - buy signal and erased some divergences.
Weekly Stochastic of the Summation Index - buy signal, in overbought territory.
Bullish Percentage - still buy signal, but turning lower with double divergence.
Percent of Stocks above MA50 - no change around overbought level, but showing weakness.
Fear Indicator VIX - extreme complacency and extreme tight BB again, pop-up is around the corner.
Advance-Decline Issues - cumulative A/D still making higher highs.


HURST CYCLES
Day 39 of the 40 day cycle. The expected pullback should be 40 day cycle low.


Week 8 of the 20 week cycle.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Combo at 13 and countdown at 10. Probably the finished combo marks a top then a pullback and the final high with finished countdown. On the weekly chart we have sell setup at 7 the odds are very good to see finished setup.

Oct 8, 2017

Weekly preview

Short term view - pullback and one more high.
Intermediate term view - several weeks for the current move up to be finished and correction to around 2420.

I thought we will see a day or two higher to around 2525 and pullback, instead we saw extended wave. I do not know a way to predict if extended wave will appear or not, it is a rare event. The pattern has not changed and the analysis is the same.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the Fibo target for extended wave v of 3 is 2568 so probably we will see one more high before a pullback. As long as we do not see impulsive reversal below 2510 I expect just a pullback and one more high.


Intermediate term - almost every analysis I read expects important top in EW terms wave 3 with the April low as wave iv of 3. The problem is the move from the August low does not fit in the pattern.... so keep in mind that this could be just the top of wave iii of 3. The next decline will show what is going on. If it is wave iv expect a low around 2420 if it is wave 4 it should move below 2350.


Long term - no change, waiting for the top of the current leg higher then one more correction and a rally before the end of the bull market. Momentum is pointing up but building double divergences.


MARKET BREADTH INDICATORS
Market Breadth Indicators - positive, pointing higher, only the McClellan Oscillator with short term divergences and around zero. VIX and other sentiment indicators showing EXTREME complacency. Such conditions always end in the same way - sharp correction to burn the greedy traders.
McClellan Oscillator - with divergences and around zero. I think we will see oversold level around 60 with the pullback and bigger intermediate term divergences with the intermediate term top for the indexes.
McClellan Summation Index - buy signal and erased some divergences.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal... with double divergence.
Percent of Stocks above MA50 - managed to reach overbought level, but overall weak.
Fear Indicator VIX - EXTREME complacency.

HURST CYCLES
Day 34 of the 40 day cycle. The expected pullback should be 40 day cycle low.


Week 7 of the 20 week cycle. The pullback should be half cycle low week 8 or 9.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Combo at 11 and countdown at 8. I think they will be finished with the expected one more high.
On the weekly chart we have sell setup at 6 the odds are very good to see finished setup too.

Sep 30, 2017

Weekly preview

Short term view - pullback and one more high.
Intermediate term view - waiting for the current move up to be finished, after that another correction which should be the biggest for 2017.

This is the first higher high from the expected two more highs as pointed in the short update two weeks ago. The same analysis - as long as we do not see impulsive reversal below 2480 I expect pullback and one final higher high. Looking at many different indexes this is the scenario with higher probability.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - 7 swings so far and for a finished impulse we need 9 swings. As long as support and MA200 hold I expect test of the break out and another high.


Intermediate term - other indexes like DAX,RUT support the idea to expect one more high with divergences before reversal.


Long term - no change, waiting for the top of the current leg higher then one more correction and a rally before the end of the bull market. Momentum is pointing up but building double divergences.


MARKET BREADTH INDICATORS
Market Breadth Indicators - still pointing higher with a buy signal. Weak for indexes making ATHs, but no signs of a reversal which says more time needed to see divergences and turn lower.
McClellan Oscillator - above zero with divergences.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - hanging at the same levels, very weak only 65% of the shares above MA50.
Fear Indicator VIX - extreme complacency again. Historically we see such thing for the first time below 10 for 5 months.


HURST CYCLES
Day 29 of the 40 day cycle. The expected pullback should be 40 day cycle low.


Week 6 of the 20 week cycle. The pullback should be half cycle low week 7 or 8.

Sep 23, 2017

Weekly preview

Short term view - more to the upside.
Intermediate term view - waiting for the current move up to be finished probably 2 weeks after that another correction.

Nothing new this week... as long as the price stays above 2480 expect the move higher to continue. At the moment I do not see signs for a reversal.

Intermediate term.... something does not look right. Now when I have looked at the charts closely market breadth is saying the decline in August is not part of the move higher from the April low, it is of different degree. If this is true this is not the top of wave 3 from the Feb.2016. Emerging markets and European indexes support such pattern. Cycles will look better with such more bullish pattern. So now waiting to see how long will it take for the current move to reverse and if subsequent correction stays above the 2400-2420 area.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I do not see finished pattern or signs for a reversal - sideway move and the indicators are resetting.


Intermediate term - I have some doubts that this the top of wave 3 from the Feb.2016 low. The next move lower will tell us what is going on.


Long term - no change, waiting for the top of the current leg higher then one more correction and a rally before the end of the bull market.


MARKET BREADTH INDICATORS
Market Breadth Indicators - are pointing higher, but very weak for indexes making new ATH, lower highs again and long term divergences are building.
McClellan Oscillator - above zero waiting for divergence before the indexes turn lower.
McClellan Summation Index - buy signal, pointing higher.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal, but could not move into overbought territory.
Percent of Stocks above MA50 - very weak only 65% of the shares above MA50.
Fear Indicator VIX - a lot of complacency again. I think we will see a divergence.
This chart is showing that the declines from April and August are probably of the same degree. The same are showing other market breadth indicators and the RSI/MACD. It does not make sense wave of such lower degree (iv) of v of 3 to cause such deep move lower and 20 week cycle low.


HURST CYCLES
Day 24 in the middle of the 40 day cycle.


Week 5 of the 20 week cycle.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We have finished sell setup on the daily chart.

Sep 17, 2017

Update

At the low in August I wrote that there is nothing so bearish because the move lower is only three waves and there is two options B wave or the last wave up to finish wave 3 on the daily chart. Until my last post two weeks ago wave B was more likely, but after initial reaction from the resistance zone we did not saw follow trough. Now it is obvious that this move is part of wave three.


I think NYSE has the most clean pattern showing five waves for wave 3 and five waves for wave v of 3.


Short term - for example NASDAQ has five waves higher, but NYSE and SPX have overlapping waves and the only way I see for a finished pattern(impulse) is two more highs. As long as the support zone holds I expect to see this two highs. On the chart is shown the NYSE index, but SP500 has the same pattern with support zone 2480-2490.

Sep 1, 2017

Update

This weeks and the next two weeks there will be no weekly analysis. If I have time I will post short updates.


SP500 is testing the resistance zone and the trend line as expected. Most of the indexes look more like a-b-c only Nasdaq more like 1-2-3 because the second wave higher is longer, but it could be just C=1,618xA. I think it is wave B, but we need confirmation first
This is a moment when you can not say if the price will break above resistance or reverse lower.... you can try to forecast, but you do not have a guarantee for an outcome with high probability.
With this said I think patience is better than trying to bet on bearish outcome at the moment and the time to be bullish was as I wrote about the short term bottom:). I do not see signs for imminent reversal so it is more likely to see toping for 1-2 days or continuation higher:
- if this is wave B(red) toping should start - boring Friday and most likely a top on Tuesday.
- if this is wave 3(green) in the next two trading days the price should continue moving higher above resistance and challenge the ATH. If SPX can not rally 20 points(wave 3=1,618x1=2490 the previous high) in the next two days this will be a warning sign for the bulls.

Aug 26, 2017

Weekly preview

Short term view - one more leg higher expected.
Intermediate term view - it is more likely that the correction is already running.

We have the short term bottom and move higher.... overall the same analysis like last week. We had one strong day and three days nothing so I think it is more likely this is wave B. As long as the price stays below resistance around 2475 it is wave B. If we see the price above it expect another higher high around 2520.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - more likely another leg higher to challenge resistance. Less likely scenarios - plunge lower from this levels and B is over or a move above resistance for a final high around 2520.


Intermediate term - I think correction is running and it will take time... most likely some combination. Now I expect one more leg higher next week and the histogram resetting above zero.


Long term - no change, expecting correction wave 4 followed by another rally higher. All indicators are pointing lower. I think RSI should at least touch the trend line before the correction is over.


MARKET BREADTH INDICATORS
Market Breadth Indicators - trying to turn higher, but no signs of strength - most likely this is wave B higher.
McClellan Oscillator - above zero cleared the oversold conditions.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal reached oversold levels.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - in the middle of the range.
Fear Indicator VIX - looks like a-b-c lower with another leg higher to follow.
Advance-Decline Issues - turned up in the middle of the range, but if you see the cumulative AD this move higher should be corrective.


HURST CYCLES
Day 4, I think the next 40 day cycle is running.


Week 1 or 8? Either we have 20 week cycle low in this case we should see higher high or we have 11+8(20 week cycle low in July) weeks and we are in the middle of the second 20 week cycle from April this fits much better wit a correction already running.

Aug 19, 2017

Weekly preview

Short term view - short term bottom and move higher.
Intermediate term view - difficult to see something very bearish at the moment..... I am not sure if a correction is running or there is one more high(SP500 and DJ other indexes made a top already).

We did not see one more low for an impulse, the market just continued with the retracement higher and another leg lower. So far I see only a-b-c from the top... not very bearish. The only bearish option is the indexes to accelerate lower for wave 3 which I do not think it will happen, even one more higher high looks better (see last chart).
Possible corrective patterns if a correction is already running - wave A of a zig-zag or wave 3 of a diagonal for wave A of a zig-zag.... and this zig-zag could be part of a triangle or combination.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - I think move higher is coming. If it is a corrective and stays below the resistance zone it is wave B. If it is impulsive and break trough resistance - one more high for the end of wave 3 on the daily chart.


Intermediate term - the pattern looks corrective may be part of a complex combination or triangle.... even another high is possible.


Long term - expecting correction wave 4 followed by another rally higher.


MARKET BREADTH INDICATORS
Market Breadth Indicators - the McClellan Oscillator says we should expect a bottom, but a short term bottom. All other indicators are pointing lower.
McClellan Oscillator - making a second trough probably with divergence.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - sell signal.
Percent of Stocks above MA50 - heading lower still elevated levels.
Fear Indicator VIX - not so funny anymore if you are short volatility.
Advance-Decline Issues - here is why this decline is different than May 17th - majority of stocks are declining. We have a sell signal and even if we see a higher high I expect a divergence and intermediate term top. So as I wrote in comments this is a mirror picture of May 17th the market is topping compared to bottoming back then.


HURST CYCLES
Day 31 of the 40 day cycle, nearing a bottom.


Week 18 we should be close to a bottom.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
The weekly chart still pointing lower. The daily chart - this sell off came one day later and the setup was negated. This is a hint that is more likely that we have a-b-c lower and not an impulse.


Nasdaq (QQQ) does not look bearish either. May be some kind of a diagonal for A and B should follow.


The same on the daily chart.


DJ - again acceleration lower for bearish pattern when the index is above MA50 looks less likely. Even higher high looks better, unless some unexpected bad news hit the market.

Aug 12, 2017

Weekly preview

Short term view - one more lower low and retracement higher.
Intermediate term view - intermediate term correction running.

Thrust higher of a triangle for wave 5 and reversal - typical price action. I hope you was not too greedy and took some profits:). We still need to see finished impulse for 100% confirmation, but all signs are pointing to intermediate term top and a correction for a few weeks.

The correction has just begun and wave 4 is the most difficult to predict. It is too early to say how it look like, but I think we should see the price at least visiting the 2320-2350 range. Last week I have explained that if we use the EW alternation rule the options are sharp sell off(repeat of the VIX/price action from 2006/2007) or time consuming pattern like triangle. The second option with a low in November for 40 week cycle looks the more logical choice.... or some combination of both scenarios above quick sell off to 2330-2350 and then boring price action for 2-3 months until October-November.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the price action looks like an impulse, but we need one more lower low for confirmation. We have bearish signs - the price broke below the trend line and the support level so the odds are higher that the impulse will be completed.


Intermediate term - RSI broke below the trend so this move is not part of the rally from the April low. I think wave 4 is running. The market needs to bleed off the greed and the options are to scare the traders(red) or time so that most of them lose interest(green).


Long term - expecting correction wave 4 followed by another rally higher.


MARKET BREADTH INDICATORS
Market Breadth Indicators - are pointing lower with sell signals.
McClellan Oscillator - oversold level. We should see a short term bottom soon.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - sell signal below 70.
Percent of Stocks above MA50 - sell signal below 50.
Fear Indicator VIX - nice spike which is not much of a surprise.
Advance-Decline Issues - plunging lower since FOMC. Lets see if this move lower has the strength to push it in oversold territory. I think the answer is yes - Cumulative A/D turned lower for the first time since March.


HURST CYCLES
Day 26 of the 40 day cycle .


Week 17, another 1-2 weeks lower for 20 week cycle low will look good.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Around the FOMC high we have finished setup and countdown - TDemark sequential did very good job spotting the top. After that we saw twice higher highs but notice the candles - bearish hanging man and shooting star 27.07 and 08.08.
Currently day 4 of setup lower and price flip on the weekly chart.