Intermediate term view - intermediate term top expected followed by sharp correction lower.
Move up to touch the trend line and reversal... not much of a surprise. The same analysis - either some kind of corrective wave 4 or if we see a reversal we will have only three waves from the April bottom which means B from expanded flat. It is taking too long for a reversal and after the ugly candle from Tuesday there is no follow through so the odds are higher that we have some wave 4 and one more higher high will follow. TECHNICAL PICTURE and ELLIOTT WAVES
Short term - as long as the price stays around support MA200 we have wave 4 and another high will follow(yellow). For something bearish we need clear and convincing move lower below support(red).
Intermediate term - waiting for intermediate top. The bearish scenario flat correction is in fact more bullish - it allows you to count iv-v of 3 then 4-5. If the price continue higher I do not see other way except counting it as the top of wave 3.
Long term - the bull market is not over, but small divergences MACD/RSI are visible so correction is expected.
MARKET BREADTH INDICATORS
Market Breadth Indicators - turned bullish last week, but now they are looking bad again.... just more and more weakness.
McClellan Oscillator - below zero now.
McClellan Summation Index - sell signal with multiple divergences.
Weekly Stochastic of the Summation Index - in overbought territory with divergences.
Bullish Percentage - the only one showing some strength moving above 70.... if you ignore the divergence.
Percent of Stocks above MA50 - touched overbought level and reversed sharply.
Fear Indicator VIX - very very tight BB again we should see a spike higher again.
Advance-Decline Issues - in the middle of the range heading lower since early June.
HURST CYCLES
Day 26 of the 40 day cycle.
Week 12 of the last 20 week cycle.... I am asking myself if the 18 month cycle low was in April???
Thank you, how about GDXJ and PM? To me, GDXJ looks like head shoulder top from hourly chart. So we expect it down in the next few days? And SPX should go down for corrective move until July 4? Thanks.
ReplyDeleteGDXJ does not look very bullish... I do not know what will happen in the next few days. I think pullback and one more move higher.
DeleteSP500 - 5 days look too long for a move lower... more likely Tuesday/Wednesday and then higher.
Honestly Krasi, I don't really see the value in your blog. In all your posts, it's always sentences like: I don't know what will happen, it might go up, go down or sideways etc... In your charts, there are always different paths usually a path down a another one up, so why bother ?
ReplyDeleteWhy not just buy good stocks and hold them for the long run ?
"Why not just buy good stocks and hold them for the long run?" - this means your time frame is long term. Why bother watching the hourly chart??? Move to the third chart weekly. I repeat week after week "no change", "the bull market is not over" since Feb.2016 - no up and down lines and "I do not know".
DeleteYou are talking about the hourly chart(short term trading completely different animal) and explain about long term approach(buy and hold weekly chart).
Decide which time frame you are trading and pick the right charts.
I like to look at all time frames and to trade the second chart.
I can post only the weekly chart and look soooo smart.... this is not interesting.
Short term trading is very difficult with a lot of uncertainty often there will be two paths. Some politician/banker will come out and fart and the path has changed.
It is difficult, it did not work for me, I moved to longer time frames.
No offense, but you do not have the thinking of a trader. I do not want to know every move I want to know when we have a move with high probability. I trade the daily chart and I need to see a trigger on the hourly chart - finished pattern. I do not care if I am wrong or not. I do not care if there is one of five paths. I want to see finished pattern. The two possible patterns are explained above and on the first chart is shown when they are confirmed. Then we have a move with high probability because everything points lower - EW,cycles,indicators,market breadth,Tomdemark countdown finished on the weekly chart.
DeleteThe second and third charts look clear to me. If you can not see how to make a trading plan to make extra profit, you should stick to buy and hold.
Hi Krasi,
DeleteBuying and holding is not a strategy. It often leads to pain and selling at the wrong time. People are all traders with different time frame. When there is pain, people will sell emotionally whether it be long term or short term. Its just human nature. Your chart brings rational and systematic method of analyzing the market to take the emotion out of the trade as much as possible. Such approach is invaluable :)
Now for my question.
It appears that our friend nasdaq is beginning its 3rd leg today. What is your thoughts on the target?
Thanks again,
Kali
5800 looks interesting for a bottom of the correction
DeleteHi Krasi,
ReplyDeletewhat are your thoughts on gold and silver?
not very bullish, probably higher in summer after that lower again.
DeleteHi Krasi, i have to say kuddos for staying sane thru this crazy market actions. Im a little frustrated with the moves b/c they have no follow thru. What do you see in rut...do u think we drop back under 1400 or we are going to 1450. Thanks in advance
ReplyDeleteSome will say I am just wrong:)) with the years I have become more patient, but I have to admit RUT 6+ months of this crap is really annoying.
ReplyDeleteThe move from the last top looks like impulse so 1400 looks more likely and correlates with wave 4 for the major indexes.
Nothing has changed the same patterns in play with ED with higher odds.
thx Krasi
DeleteThanks for Update
ReplyDeleteHi Krasi,
ReplyDeleteToday looks like a great confirmation for the wave 3 down for nasdaq... Do you think that S&P is entering the correction phase as well?
Thanks,
Kali
It is still only a-b-c. If it continue another 1-2 days to 2400 we could see an impulse, but until then there is no confirmation.
DeleteNow do we expect the green bullish scenario? Correction looks finished....
ReplyDeleteYes, it was more likely to see the bullish scenario and with only three waves lower it is confirmed.
DeleteAnd how about biotech sector xbi/ibb? It seems close to top but? another wave up along with spx?
DeleteThe same wave 4 and one more higher high to finish the move from the May low.
DeleteHow long do you expect about the wave 4? Few days or only yesterday... So tricky to handle
DeleteFor the major indexes it was 6 trading days.... this is more than enough.
DeleteIBB two days... with corrections you never know it can mutate to more complex pattern. So far only a-b-c for 2 days, but it can mutate to double zig-zag. The important message is it is a correction.
It seems to be retest of the lower bound? or another wave down for the correction? Thanks.
ReplyDeleteOverlapping waves... it is tricky it should be another leg of the correction, but the weekly indicators look awful. Alternate we have 5 waves lower and it could be some expanding diagonal with deep retracement but lower high. To be sure we need to see the move higher.
DeleteWhat weekly indicators are you looking at? Thanks. I just feel june is yet the time to go plunge and MACD RSI divergence is not mature. How do you think?
DeleteMACD/RSI on the weekly chart divergence and turned lower. Quarter and holidays... it will be strange to see a plunge now. Worst case deep retracement to 2440 before plunge.
DeleteIf we have seen the top of wave 3 in Spx and the wave 4 started it can fall to anywhere between here and 2100 and still be intact according to EW principle. What do you think Krasi? Thanks
ReplyDeleteKrisarnold
Technically yes... for wave 4 I expect something between 2280-2320.
Delete