Intermediate term view - close to intermediate term high and topping process in December.
We saw higher high with an exhaustion gap on Monday and a pull back... so far so good, but I do not see impulsive price action lower and looking other indexes short term up is expected. Intermediate term this should be the top of wave 3 from the Feb.2016 low. TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the price action so far looks corrective not impulsive... I suspect bigger wave iv and one more high.
Intermediate term - the same like last week topping expected in December. Primary scenario the top of wave 3 from the Feb.2016 low.
Long term - one more correction and a rally before turning very bearish. The next wave lower will show us if the move from the Feb.2016 is over or not.
MARKET BREADTH INDICATORS
Market Breadth Indicators - some are turning lower, but other like McClellan Summation Index will look better if we see continuation for another 2-3 weeks higher.
McClellan Oscillator - moved above zero, more divergences?
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - still above 70, no sell signal.
Percent of Stocks above MA50 - around the 75 level, divergences before reversal?
Fear Indicator VIX - I expect more higher lows.
Advance-Decline Issues - weak plunged lower close to the zero level.
HURST CYCLES
Day 16 of the 40 day cycle.
Week 3 of the next 20 week cycle.
Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
After finished sell setup we have several days closing in the red... we will have confirmed sell signal when we see price flip on the weekly chart and this is close below 2585-2575 area for the next two weeks.
Now it seems rally until fomc is more possible situation? Thanks. If so, how about Christmas rally? XBI looks strange because IBB is still bullish yet xbi seems so bearish... And GDXJ seems bottoming too? Topping is really confusing :)
ReplyDeleteYes, so far higher until FOMC looks more probable. I do not know how exactly it will play out between now and Christmas. I do not expect some strong rally. I think we will see the top this week, but serious decline after Christmas. I suspect after FOMC lower for several days then higher to test the high. At the end it will look like a sideway move for about a month from 30.11 with the top in the middle mid December.
DeleteToping is always confusing and such long lasting moves do not die fast.
Short term you never know if there will be one last wave or sometimes it never comes. The only way to trade tops/bottoms is patience and building position in small portions.
Intermediate term looks better you see the right conditions developing - EW pattern, cycles, indicators, other markets confirming that trade is changing... Bonds(TLT) looks like a triangle and soon another move higher for several months is expected, PM/Miners start looking like a finished pattern and 2 year cycle low so higher for a few months expected.
XBI and IBB the intermediate term pattern looks different the move lower for XBI like a-b-c and for IBB like impulse. The correction higher looks the same.
New highs , but ndx and iwm lagging ...are you still seeing us in 5 up to a new high in the Nasdaq? If so , spx has some to go too.
ReplyDeleteThanks
So close to a top you can never be sure if there is one small wave left or not. If I have to bet I would say one more high is missing for NDX. It is not some strong rally, slightly higher high will be enough and for SPX this is 10 points higher something like 2675.
DeleteHi Krasi,
ReplyDeleteBack from a nice break.
Looking at the chart, xbi and ibb dichotomy presents a real interesting problem. One says higher high coming, another says lower low coming.
Happy holidays Krasi,
Kali
The move from mid-November is corrective I do not see how biotech will make higher highs....
DeleteHappy holidays to you too!