Short update only the relevant charts and earlier because I am busy this weekend.
We saw a move lower, but more complicated and deeper than expected. The price touched twice support levels(second chart) - first 38% Fibo and the upper support line and second time 50% Fibo and the lower support line. There is no room to move any lower.
What we have so far is only three waves(corrective) and bounce from MA50/support/Fibo level... but the weekly indicators look bad, market breadth looks bad anyway.... What I want to same is the pattern is not 100% clear which is not a surprise around tops.
The price is above MA50 on the daily chart, we have the end of a quarter and holidays so a plunge looks less likely.
If it is a bullish pattern one more higher high - we should see a move to the last top around 2450 with impulse and small pullback.
If it is a bearish pattern and the top is behind us - we should see weak move three waves higher because of the holidays(thin volume).
For those who blame me that I always draw up and down - sorry that I can not nail the top of wave 3 in bull market at the hourly level(sarc).
You can not trade the hourly chart close to a top with buy and hold. This is completely different trade - this is hit and run.
Here is a trading plan for hourly chart hit and run - if you see impulse to the previous high after a small pullback buy and ride the last 30-40 points, if you see weak move three waves sell with tight stop(the last high) and ride lower.
You do not trade what you do not know you trade what you know weighting the probabilities.
If you can not understand what I explain above and can not create a trading plan(something completely different than analysis) with the information presented on my blog - you just can not trade this time frame move to daily or weekly. How many times have I changed the weekly chart since Feb.2016?
TECHNICAL PICTURE and ELLIOTT WAVES
Short term - how both scenarios should look like.
Intermediate term - the chart which I have posted on 21.June updated - you can see how price plays with support, Fibo levels, MA50, RSI trendline.
If you can tell me if RSI will bounce from the trend line or break lower than I can tell which scenario is playing out:)
Hi Krasi, Thanks for update. question... in first chart if Red Scenario happens, then what about wave 5? going down after 4... it means we already passed waves 4 and 5?
ReplyDeleteBased on my analysis; to me looks like the Green scenario is more probable. :) Thank you.
Yes, I think too the green is more likely. Red is just wave C of 4 an then 5 should follow.
DeleteHi Krasi,
ReplyDeleteWhat level looks good for retracement on the QQQ before it resumes the wave 3?
Thanks,
Kali
Probably it is a flat for wave 2 or B so 142.
DeleteSPX is not as bullish as we expected? Thanks. Or we can see it's still hanging around for wave i or ii of this final small wave V (green scenario higher high)? And how about GDXJ? I feel gold miner could plunge more for lower low in the next few days when SPX spike higher high?
ReplyDeleteStocks do not look very bearish move higher is more likely, miners look weak... that is all.
DeleteI do not see correlation - see the link. Correlation swings between positive and negative. There is no fix correlation and even less on day to day basis.
http://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=1&mn=6&dy=0&id=p82117451538
Thank you for nice picture. So if GDXJ may not plunge, but only weak move up, like some corrective move? or building its bottom? I think our initial expectation is weak move up in the summer. What's your expectation for the next 4 weeks or so? Thanks.
DeleteI do not know what will happen in the next 4 weeks, I do not see a setup with high probability.
DeleteThe expectation was higher in summer we have it, but it looks weak and corrective as it should be because the important low is expected in Q4.
If this corrective move is over or if it will continue a few more weeks I can not say.