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.

Aug 8, 2017

Update

We have a triangle which is usually wave 4 and break out as expected, finished pattern from the June low and MACD divergence.... it smells like a top, I can not see more bullish counts.

Aug 5, 2017

Weekly preview

Short term view - one final high.
Intermediate term view - after the high intermediate term top and correction for a few weeks.

One big nothing this week... but nothing is information too. The signs are pointing to one more high - long sideway move favors wave 4 which means to expect one more high, cycles - it looks like mid cycle low around day 20 for the 40 day cycle and one more higher high.

Overall the indexes look different - DJ strong, Nasdaq/SP500 sideway move(>15 days in this 10 point range), Europe,RUT,DJT weak correcting already.
I think they will synchronize DJ/SP500 making one more high and the weak indexes retracing higher then all sell off for a few weeks.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - this sideway move starts looking like a triangle and favors the bullish pattern from last week so I expect bullish outcome.
Alternate it still can test MA200, but as long as the price stays above 2450 the price action is bullish.


Intermediate term - wave iv of 3 does not make much sense anymore so I removed it. I think this is the top of wave 3.
When the top of wave 3 is behind us I see two options for wave 4 - wave 2 was a flat so wave 4 should be something different(the rule of alternation).
- If history repeats (VIX/Price behavior from 2006/2007) we should see a zig-zag (red).
- the other option is a pattern which will consume time - triangle or complex correction.


Long term - no change. We should see at least one more higher high for the bull market. RSI/MACD look bad - it is more likely to see a correction before another significant move higher.


MARKET BREADTH INDICATORS
Market Breadth Indicators - most of them turned lower and showing signs of weakness....
McClellan Oscillator - below zero. One move above zero and divergence for the final high will look great.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - buy signal, reached overbought level.
Bullish Percentage - turned lower and now below 70.
Percent of Stocks above MA50 - turned lower after second failed attempt to move above 75.... sign for a weakness. And long term divergences.
Fear Indicator VIX - around 10 with very tight BB again.


HURST CYCLES
Day 21... we have have something like a bottom in the middle of the 40 day cycle around day 20. This 20 day cycle was strong right translated so the next 20 day cycle is expected to make a higher high.


Week 16 - it is getting more and more likely that the 18 month cycle low was in April.