Intermediate term view - now very close to intermediate term top, overall we should see topping process in December.
1-2 i-ii looked like the less likely scenario, but it has played out. I have suggested another one because RUT was already in iii of 3, Europe reversed long time ago, EM and tech were tired and reversed this week.... John Doe suggested that this is "rotation happening into the 'biggest' beneficiaries of U.S. tax reform" It makes sense last final hooray riding the news. TECHNICAL PICTURE and ELLIOTT WAVES
Short term - last week too many options were possible, but now the pattern looks clear like 1-2 i-ii impulse with the last wave 5 running. The indicators say this is the more likely scenario.
Alternate the move could be finished, I have seen so many times the last missing 5 of 5 of 5 never appearing I would not be surprised.
Intermediate term - classical overthrow above the trend line and last blow off. Overall December looks like topping process up and down. First next week the current wave from mid November should be finished, then lower to test MA50, then higher to test the top and the trend line... I do not expect some serious sell off before January.
Long term - one more correction and a rally before turning very bearish. The wave lower will show us if the move from the Feb.2016 is over or not.
MARKET BREADTH INDICATORS
Market Breadth Indicators - are bullish it will take time for topping and reversal which fits with the cycle and my expectation for a choppy December. The only warning signal is VIX, the indexes are exploding higher and it spikes higher to 12 instead of plunging to 9.
McClellan Oscillator - above zero, but with intermediate term divergence.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal.
Percent of Stocks above MA50 - managed to move above 75.
Fear Indicator VIX - higher low despite the euphoria, first warning sign. I think we will see a series of higher low before a strong sell off.
Advance-Decline Issues - heading higher for the overbought level.
HURST CYCLES
Day 11 of the 40 day cycle.
Week 2 of the next 20 week cycle.
Here is top-to-top analysis. If it is right this should be 18 month cycle high.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Another sell setup finished on the daily chart and we have now 9-13-9 from the August low.
Great call Krasi! I wish I had not succumbed to my emotions which led me to short s&p500 last Friday. Now I hope the market turns south before my option expires. When do you think that should happen and how deep the first impulse will go. Thank you for all the good work you do.
ReplyDeleteKris
We should see one short living move (1-2 weeks) lower to MA50 on the daily chart and then test of the top until January. After that expect something bigger.
DeleteThe problem I have is that all indexes look different.... some say we should see a top and move lower other to expect a bottom and move higher.... or surprise is possible and acceleration lower.
DeleteSo I am a little bit confused if SPX will start moving lower now or in a few days
Krasi, we could also get an expanded flat 4 before a final push higher tricking people that a top is in place when in fact it is just the B of an expanded flat. Markets are overextended and I doubt they try to push higher from here directly. we need a little bit of consolidation first...so i think we are in a 4th wave for couple weeks....
DeleteYes, I think too something will happen and the indexes will stay around this levels for a while.
DeleteHow about QQQ and biotech? Should QQQ also have another wave 5 along with spx or? Now it appears tech is weak while industrial, financial and materials sectors are so strong??
ReplyDeleteQQQ will look great if it makes one more high.
DeleteXBI looks like ugly W-X-Y corrective pattern and this should be the top.
Krasi how do you feel about uvxy your thoughts
ReplyDeleteI have the feeling the indexes will try to make one more high so XIV could move to 122-123 for UVXY this is somewhere between 12-12,50.
DeleteI was thinking the same thing what would be your Target to the upside on uvxy 22 and thanks
DeleteI can only estimate it roughly. The first move lower for the indexes should be short living and not causing a lot of fear. XIV 20%-30% lower so I would say UVXY between 18-20.
DeleteIn January/February should be more interesting.
Yesterday was a strange day - it felt like the main indices wanted higher but were dragged lower by tech . Are you seeing room for a higher high this week before a test of support below 2600?
ReplyDeleteEurope and Tech stocks should move higher in the next few days. In this case it is possible that the move lower from yesterday is just corrective (another wave 4) and we will see one more high.
DeleteThanks for the rapid response ....appreciated
ReplyDeleteHi Krasi, seems to me that this is the beginning of the end, i.e. 5-V. It happens to most of the major markets. LOoking at the technical indicators for these major markets in EU and Asia, we have seen quite a long period of bearish divergence for a few indicators, i.e. MACD, DMI, Stochastic, etc. My experience is that once it turns, it will turn sharply and quickly. That's happening in Asia today. What do you think? How probable do you see this 5-V? thanks for your analysis.
ReplyDeleteIt is possible that this is the top(shown in red on the daily chart), but the US indexes do not show the usual divergences... no RSI divergences weekly, no VIX divergence, no A/D cumulative divergence.
DeleteSo even if this is the top I expect it to be tested something like double top.
Thanks
DeleteIt seems spx is still very weak. Maybe this wave 4 is longer and deeper than we expect?? What's the support area? Thanks.
ReplyDeleteespecially vix is still quite high and only for corrective move lower down.
DeleteI do not know which wave 4 you mean. Either the top is in(as shown on the hourly chart) or we have much bigger pattern which begun in mid November.
DeleteI am commenting that looking at other indexes topping pattern double top or one more higher high is more likely than sharp reversal and sell off. So far it looks like this is the case.
VIX usually makes 2-3 higher lows before we see the top. I think exactly this is happening, we have already one higher low and the next top(lower or higher) will come with another higher low.
How high do you expect for QQQ? Now it may be another wave 5 higher or just B wave rebound... XBI has similar situation? And GOLD should be bottom along with the spx finish the final move up? Thanks for your insight.
ReplyDeleteAt the moment I think it is more likely final wave 5 higher with target for QQQ around 159.
DeleteXBI is different some corrective pattern with two corrective waves up and down the options are flat correction or triangle running.
PM are heading lower for a two year cycle low and they should rally for a few months after that.
Krasi are you expecting a move up in the market
DeleteAlso how are you feeling about uvxy at this level of 1229
ReplyDeleteThe indexes look different.... I think some made a top already, but SPX and Nasdaq will look better with one more high.
Deleteuvxy - this move lower was expect, but now I can only guess.... it is difficult to see a bottom at the moment. I think we will see a pop higher and one more low.
How about IWM? To me UVXY is not yet bottoming, does it mean indexes would go higher next week or until Christmas for the final rally? Thanks.
DeleteIWM is more likely it made a top already.
DeleteSPX either rally for a few more days until FOMC for a new high or we see a pullback until FOMC and moves higher until around Christmas.