Intermediate term view - the last wave higher from the August low is running.
The indexes are higher as expected.... currently I see corrective waves up and down so I suspect some ED is running. Last week I have mentioned that cycles do not fit and relabel will be needed... I think we saw a stealth 40 week cycle low. You can see it if you loot at market breadth (McClellan Summation Index) and the price just moved sideways for 4 weeks. I have mentioned a few times that the move from the August low does not fit in the pattern... so there is an option that the move from the Feb.2016 is topping and this is wave 5 and not 3. This is shown on the daily chart, the Fibonacci measurements fit way too good to ignore it. TECHNICAL PICTURE and ELLIOTT WAVES
Short term - so far the move looks like a-b-c and the suspected pattern is ED. As long as the support area and MA200 hold it is ok... below this levels it is dangerous for the bulls.
Around tops the patterns is always not clear - alternate options are this is the top or sharp sell off to 2560 for flat correction or 1-2 i-ii and acceleration higher(not very likely).
Intermediate term - I want to see the histogram and RSI resetting higher before another turn lower. The bearish option is shown in red... Fibo way to perfect to ignore it.
Long term - even if this is the top it will be tested so no change, one more correction and a rally before turning very bearish.
MARKET BREADTH INDICATORS
Market Breadth Indicators - McClellan Summation Index very bearish for weeks suggesting that we are seeing important low(40 week cycle low), but Bullish Percentage never gave sell signal and price has not followed lower. Now most of the indicators are turning higher so I think cycles and market breadth are hinting move higher for a few weeks.
McClellan Oscillator - above zero for a while.
McClellan Summation Index - turned up and a buy signal.
Weekly Stochastic of the Summation Index - in oversold territory.
Bullish Percentage - positive, buy signal.
Percent of Stocks above MA50 - weak below 75.
Fear Indicator VIX - will we see the first higher low?
Advance-Decline Issues - turned up and moving higher.
HURST CYCLES
Day 6 of the 40 day cycle.
Week 1 of the next 20 week cycle if I am right about the 40 week cycle low.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
We a have a finished sell setup on the weekly chart and four weeks sideway move. For the next week price flip is a close below 2587.
Thanks Krasi. What is ED?
ReplyDeleteEnding diagonal.
DeleteKrasi, do you have an EW count or target on the RUT by any chance? ED doesnt work for it. Look like an impulse too me
ReplyDeleteYes, it is an impulse... I do not think we have finished 3 and 4 so I can just assume standard Fibo levels and in this case the top should be around 154,50(IWM I do not have RUT intraday charts)
DeleteWhat do you think of other indicators like Bollinger Band? Thanks.
ReplyDeleteIt is ok, but nothing special. I can swap it easily with other indicators.
DeleteYou can use it to trade, but it does not give you some extra information.
I read so many books about TA with so many indicators.... at the end they do the same job and have the same pros and cons.
Thanks. I think it's also hard/ not necessary to follow too many indicators? Because when I see charting software ad, they bluff that they have thousands of indicators/tools :) By the way, which charting tools are you using? Is it worth to subscribe some charting software? Thanks.
DeleteDo you think volume profile/analysis is useful to provide information about potential support/resistance? And it looks like some people and trading individual stocks using pattern or technical indicator screener? What do you think about its reliability and possibility? To me I'm worried that individual stocks are more volatile/arbitrary so that the pattern may not be solid and tend to fail easily? For index, EW rules/measurement looks more or less reasonable, but individual stocks it looks very easy to pop up like rocket due to some news and down like rocks due to other news? Again highly appreciate your ideas and hard work.
DeleteAfter a few years watching the market it is getting clear that it does not matter if you use 2 or 10 indicators:) I use only basics MACD,RSI,moving average.
DeleteI am using http://www.freestockcharts.com/ the free version so far it works for me. You can organize all your charts in layouts with several charts per layout.
Volume analysis is subjective, not helpful for me. To check if break out lower/higher occur with volume above the average is ok, but that is all.
I have not used stock screener and I have no observations, but I think it should work. For example always trading in the direction of the trend and search for stocks above MA50 and RSI dropped to 50 (stock correcting at the moment) I do not see a reason why it should not work.
It depends on liquidity for the stock - the patterns are based on human emotions if there is enough crowd TA will work fine if not you can see patterns fail and a lot of volatility.
I check the ETFs that I trade and if I do not see volume above 1M per day move on to the next.
Searching for individual stock needs time this have to be your job. I focus only on two three markets and trade ETFs.
Shooting for the top of the channel around 2620 - a throw-over there would eat up a few stops maybe ?
ReplyDeleteIt is simple impulse from the low either wave 3 or the top of the wave from 15.November
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