Intermediate term view - the correction to continue for 5-7 weeks.
We have a move lower... obviously a correction is running since 1.March. Do not get too exited, as expected the first part takes time and it is shallow, later in April should be more interesting. So far we do not have impulse lower only a-b-c and at day 37 the 40 day cycle the indexes are nearing a bottom. The short term looks confusing, I have the feeling that every index has different pattern. Looking at the weekly chart it does not look like it will reverse and rally so I think we will see finished impulse, but waiting a few days for confirmation is not a bad idea. If I am wrong we will not see one more lower low for a finished impulse and higher high is possible, but it will be short living. From trading perspective in both cases you have to wait roughly two weeks for a better entry unless you are a day trader. I have changed the alternate scenario on the daily chart - I removed the alternate bearish scenario because it takes too long for the price to follow market breadth and added bullish one if the major indexes move in sync with Nasdaq(see below the chart). TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the major indexes do not look weak. Weakness are showing DJT,RUT,XLF(see the last two charts). So far we have just a-b-c, the bears need one more push lower to confirm that a bigger correction is running.
Intermediate term - The new alternate scenario is shown in sync with Nasdaq. DJ/SPX - you can count wave iv/3, but not for Nasdaq.
RSI moves too steep lower and we have MA50 support... add to this mature 40 day cycle so I expect short term bottom soon. The only question is if we will see one more lower low or not.
Long term - no change, waiting for the wave from Feb.2016 to be finished. I think we should see a move lower for a few weeks
MARKET BREADTH INDICATORS
The Market Breadth Indicators - are in correction mode pointing lower, but not strong sell signal more like indecision.
McClellan Oscillator - around the zero line, waiting for decision up or down.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - still above 75.
Percent of Stocks above MA50 - in the middle of the range...
Fear Indicator VIX - BB is expanding, but the bears need break out of the range above 13.
Advance-Decline Issues - in the middle of the range.
HURST CYCLES
Day 37 of the 40 day cycle. We are nearing the low for the current cycle.
Week 9 of the last 20 week cycle. Expecting 18 month cycle low late April/early May.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We have finally price flip on the weekly chart and sell signal. This chart looks like reversal - the candle and the oscillator. It is less likely to reverse again and head for higher highs.
NASDAQ - in contrast to the DJ/SPX it made a new high with an impulse this week. The count shown below looks much better for this index.
RUT and XLF have better looking patterns, but still we need one more lower low as confirmation.
Hi Krasi: I wonder if you could clear up something: last week I asked whether after a stiff decline it might be a good idea to consider entering position in the SOXX index, one of the best indices on the Nasdaq if not the market. You thought that would be a bad idea. I see now you have potential new highs drawn on the NAZ. Have things changed? Regards.
ReplyDeleteI see higher highs for all indexes, the bull market is not over. But I would not buy now. It is more volatile and if SPX moves 5% lower SOX will drop 10% or more.
DeleteCiao KRASI. Grazie di condividere le tue Analisi Pubblicamente, guardavo il dow sul setttimanale con mcd Oltre i 600 con istogramma in divergenza ..... Certo ce 'Molta euforia nel Mercato ..... ma' Il Rischio di chi e 'lunga e' altissimo, perche 'se scaricano Gli indicatori, non si potrebbero limitare solo Una semplice correzzione .... ma' potrebbe osare via ad un vero e propio incidente Che potrebbe durare Diversi mesi
ReplyDeleteIf the correction continue this is the one which will last 2-3 months and reset greed before the last run higher... something like February 2007. The top do not occur at the point of max euphoria it comes later.
DeleteKrasi,
DeleteHow is it that the cycles vary so much? This 20 wk cycle was so much shorter than the previous two cycles? How does one account for this? Does this mean current correction will be longer than prior 2 corrections?
Thanks,
Kali
The 20w cycle vary, but usually when there is one longer one shorter follows and we have average 40 week cycle
DeleteThe previous 40 week cycle was longer two longer 20 week cycles and the current 40 week cycle should be shorter that is why it is not a surprise that we have shorter 20 week cycle. I expect the current one to be with average length 14-18 weeks we have already one with 11 weeks length.
Krasi: the conventional market and gold are diverging here at least for now. The miners are lagging the metal which has shot much higher. I wonder whether this is a trap and the miners after a short spurt higher will decline along with the markets until April/May and both move up together in earnest from there with the conventional markets new highs. Maybe a test of that breakout point at 2100 on the S&P. USDJPY has broken support- good for gold- but maybe late in the cycle to gain any traction at this late stage. Regards.
ReplyDeleteWhy should conventional market and miners move in the same direction? I am not aware of such correlation. I just watch the chart and do not try to couple it with something else on daily basis.
DeleteUSDJPY moved lower... it is the same story - crossroad if it makes an a-b-c from the top or plunges much lower for 1-2-3. I think USD is bullish and PM bearish, but I wait to see confirmation first.
I'm thinking the USDJPY has broken critical support as this appears to be an unwind of the yen carry trade from the November election. Since the election, yen down has translated to S&P up. This unwind still has a ways to go and should take the S&P down along with it is what I'm thinking. I'm simply open to the idea that once the carry trade unwinds, the USD may continue to fall but this time benefit both gold and the S&P.
ReplyDeleteKrasi,
ReplyDeleteI see completion of the "b" wave for nasdaq as today or tomorrow. With another leg down to follow. What do you think?
Kali
The other indexes have different pattern and look like we are close to a short term bottom with the 40 day cycle close to a bottom too. So I do not think it will reverse and plunge.
DeleteWe had one more low and now this looks like the short term bottom for the 40 day cycle.
ReplyDeleteOnly XLF looks like clear impulse lower, for the SPX/DJI it could be just an a-b-c or impulse.
Just wait a few days, no need to guess or hurry to short.
Thanks
DeleteHi Krasi
ReplyDeleteAfter the recent action so far what do you think, are we in iv of 3 or is it 4th waive? Could this develop into something more serious? From what you say about 40 day cycle this correction may be over, is it? From what I see it may be may be 4 of A correction. Still B and C to follow. What do you think?
Thank you Krasi
Krisarnold
Nothing changed - if we see a higher high it will be short living and this will be the top of iii or 3, then we watch for iv or 4 (the second chart).
DeleteHi Krasi, thank you for your posting I have learnt a lot from you, i recalled that you have mentioned in the past few posts that PM, PM miners and the market will go down for a while but it looks like whenever both the market and PM miners but PM is up, the PM has moved in the bullish prediction, do you think PM will continue this bullish trend until the french election?
ReplyDeleteI am not sure about the pattern in the next one month. Gold miners look weak and USD should finish the correction, which is not bullish for PM rally in April.
DeleteHi, how long do you expect the current short term up? Days or weeks? Are we in the intermediate term chart white line up move b? Thanks.
ReplyDeleteAt least until the end of this week, the big boys want to have nice numbers for the end of the quarter. I think next week will start higher too.
DeleteWe have to see how the move develops before we can say if it is just b or we will see one more higher high.
Now spx touches MA20, prefer wave b or? At least we should see a pullback now? Thanks.
DeleteIt is an impulse so either 1 or a of B
DeleteStill expect up move to finish another leg of B or impulsive move up? Thanks. A little worried next Monday may be gap down? Thanks. Besides, GDXJ should expect more rebound up until exhaustion?
DeleteNo change now 2 or b of B is running. The next move higher will make the difference. It does not look like it will gap lower and plunge.
DeleteShort term GDXJ no clue, I do not see an edge at the moment... more likely lower.
GDXJ has such long upper shadow...what does it mean? some analysis says today is "low volume test", if it's true, short term I'm worried it may gap up to touch ma20 and then begin to fall
DeleteLong shadow means the traders use the move up to sell their positions... there is supply.
DeleteThank you so much for the analysis. What's your opinion about options trading? You tutorial is very nice. Is it possible to comment or summarize options trading? Thanks. As far as I know, options trading involve not only direction but also timing, and it's pricing is nonlinear... so pretty tricky...
ReplyDeletei trade options for most part! shout me an email, we can exchange some ideas. I have some good pdf references raymondjonesmails@gmail.com
DeleteI will sum it up this way - you like it or not:)
DeleteTwo of my friends traders make money trading options and they are saying it is much easier than trading stocks. The have tried to convince me a few time, I have tried it... it is not for me, probably I do not like it.
I do not have arguments against options trading. Yes, you have to keep an eye on the time component and volatility. There is a few strategies with high odds you are on the other side you are the casino/the bank and they always win:) and when you lose you make rollover:)
Take your time to understand options trading, try it and if you like it go for it.
Raymond curios to hear what strategies are you using?
Delete