Sep 22, 2018

Weekly preview

DJI catching up with SP500 and gives the impression that stocks will go to the moon. The bulls cheering seeing of course 3 of 3 of 3 melt up for months... nice fantasy. The character of the market has not changed - neither the pattern nor market breadth nor the indicators nor cycles suggest that something changed.
So far SP500 is testing the trend line one more time with divergence nothing more. Short term I see corrective waves most likely the ED which I am showing in the last few weeks. Again no melt up before move lower.
More interesting is the big picture - either wave 3 is finishing or wave B so no change either. I think wave 4 and 5 to complete the move from 2016 will look better, but wave B could not be excluded as a possibility at the moment.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - RSI shows series of zig-zag moves... I can not see the impulse. Probably the ED which I am showing for a while with shorter wave ii. If this is the pattern expect lower until FOMC next week and one more high. Alternate this is wave b and decline for wave c will follow.


Intermediate term - MACD,RSI,histogram are saying toping not the beginning of multi month rally. Topping should continue the last week of September and in October at least MA50 will be tested. This move lower should clarify the big picture which pattern is running - impulse with 4 and 5 to be finished or wave C lower for 6-9 months.


Long term - no change waiting to see how the big picture will look like... one more high or not before a bigger decline. Again looking at the RSI and the histogram multi month melt up is a fantasy.


MARKET BREADTH INDICATORS
Market Breadth Indicators - the same turned up, but no run higher or overbought levels etc. to show strength.
McClellan Oscillator - around the zero line, most likely one more high with divergences.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal.
Bullish Percentage - turned up, another high below overbought level.
Percent of Stocks above MA50 - turned up, another high below overbought level.
Fear Indicator VIX - divergences, I hear again VIX 9 and staying there - clear fantasy. Expect multiple divergences when we hit the top.
Advance-Decline Issues - turned up, around the middle area.


HURST CYCLES
Day 27 of the 40 day cycle.... sometimes the 20 week cycle consists of three shorter daily cycles instead of two 40 day cycles. This one feels like we have three daily cycles - the yellow count.


Week 12 of the 20 week cycle. It is time for a pause not a rally.

Sep 15, 2018

Weekly preview

Nothing new retracement higher as expected. I think we are seeing a high and correction should follow with intermediate term low in October. Looking at cycles and market breadth I do not see how this is the beginning of iii of 3 and multi month rally. We will see a rally into year end, but first a correction to kill the dip buyers.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the most bullish pattern I see is ED(yellow) if we have a shallow pullback. Looking at cycles and different indexes/shares a bigger correction for a few weeks will look much better.


Intermediate term - even if SP500 makes a new high this will be just another touch of the trend line with MACD/RSI divergences. I do not see the beginning of a strong rally. Market breadth and the indicators are topping and not resetting for a run higher.


Long term - the same story... the histogram and slow stochastic are topping and not preparing for a run higher.


MARKET BREADTH INDICATORS
Market Breadth Indicators - no change I see topping indicators with some already flashing red.
McClellan Oscillator - resetting higher after plunge lower.
McClellan Summation Index - sell signal with divergences.
Weekly Stochastic of the Summation Index - sell signal, turned lower with double top.
Bullish Percentage - hanging below overbought level after another top.
Percent of Stocks above MA50 - hanging below overbought level after another top.
Fear Indicator VIX - expect series of higher lows and multiple divergences.
Advance-Decline Issues - broke the trend line and made a lower low after holding the trend line for months.


HURST CYCLES
Day 22 for the 40 day cycle. I think me have mid-cycle low at day 17 and after this high the indexes should turn lower for a few weeks.


Week 11 for the 20 week cycle. The average length is 14-18 weeks. At week 11 the cycle is mature we have 3 sideway weeks and I think the 20 week cycle is topping and it will turn lower.

Sep 8, 2018

Weekly preview

I was expecting to see correction in September and it is running. Target should be at least MA50 on the daily chart. The last leg higher looks to me like three waves. If we see only a zig-zag lower to MA50 it should be ED. The problem is we have very ugly weekly candle and cycles with marker breadth are pointing to decline for several weeks for 20 week cycle low.... I am curios could we see a decline for a few weeks to MA200 and the trend line from the Feb.2016 low for a rare pattern?(see the last chart). Anyway the leader the tech sector with clear impulse lower so expect more to the downside.

Some changes for the long term charts:
Cycles - the move up takes too long so it is more likely that the cyclical model with shorter 18 month cycles is the right one. Indexes like DJT,DJI,XLF,NYSE made a significant low right on time in June so I switched back to this cycle count.
Long term chart and EW - the current 4 year cycle is strong right translated and with high probability the next one will make higher high. This means it is more likely that the expected top is wave III from 2009 and not V. In 2019 we should see 4 year cycle low and most likely we will see scary but short living correction 20%-30% which fits with wave IV from 2009.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the bulls see i-ii iii of 3 of 3 to infinity what else:) nonsense of course. I see only three waves higher and decline which is not finished with target MA50 daily at least.


Intermediate term - we have two zig-zags higher B(red) or with some creativity you can count an impulse(green). Looking at the indicators and market breadth 3 of 3 of 3 is clear fantasy. RSI is saying a wave of bigger degree is running.
I will love to see a drop to MA200 and the trend line connecting the lows from Feb.2016(yellow) for a crazy pattern - expanded ending diagonal.


Long term - I was not very bearish for the long term, but now with the price moving higher more than 2/3 of the time it is more likely that this is wave III. Strong divergences MACD/RSI so the indexes are close to important top. Strong decline to purge greed are common in a bull market. Since 2009 we had twice 20% corrections after 2-3 years rally higher.
In the case of B wave(red) the decline will be too short both price and time testing MA200 and 0,236 retracement and wave II was already some expanded flat(EW alternation rule). The green scenario will look perfect - alternate pattern zig-zag, 38,2% retracement to support and the trend line, just on time for the 4 year cycle low. This is the preferred scenario for the long term.


MARKET BREADTH INDICATORS
Market Breadth Indicators - weak could not move into overbought territory and divergences. The difference is this time they are reacting to the move lower and I suspect they will drop lower with the indexes making one more higher high and market breadth with clear divergences signaling reversal.
McClellan Oscillator - heading for oversold levels.
McClellan Summation Index - sell signal with divergences.
Weekly Stochastic of the Summation Index - in overbought territory expecting to turn lower.
Bullish Percentage - turned lower.
Percent of Stocks above MA50 - turned lower.
Fear Indicator VIX - divergence... expecting multiple divergences with the indexes making one more high.
Advance-Decline Issues - this time it is reacting to the decline. I expect to see lower low and broken trend line followed by lower high and divergence with the indexes making final high.


HURST CYCLES
Day 17 for the daily cycle. Another three weeks or more before an important low.


Week 10... With the old model in September/October 18 month cycle low was expected, but instead weakness we are seeing strength. This fits with my initial model with shorter 18 month cycles so I switched back to it.


DJ the "crazy" pattern is better visible. I have never seen expanding ending diagonal, but who knows.... it will solve a lot of problems with synchronization between different indexes and some shares which I watch for guidance. If we see a zig-zag lower to MA200 with very high probability this is the pattern.

Sep 1, 2018

Weekly preview

The indexes touched the trend lines as expected, SPX slightly above it. Nothing changed so no need to change my analysis - decline is expected in September and it will show us what is going on.
I am showing a bullish case for those who see triangle and impulse higher. It does not fit with other indexes for example NYSE, but we will assume that we will see a non-confirmation SPX with higher high and NYSE lower high. To fit cycles I have to switch to my model with shorter cycles(last chart) not the best fit, but not impossible. I am starting to think that we have already 18 month cycle low in the summer because it is taking too long. Even in this case I see a move lower for wave iv of 5 something like 80-100 points.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - SP500 stronger than DJ moved slightly above the channel, but no decisive break out. EW, Fibo measurements and RSI are saying one more high to finish the impulse will look perfect - the labels in brackets.
Green labels for wave 3 the bullish case. Target for wave 4 is usually the low of the previous wave iv where we have support and the trend line.


Intermediate term - I think test of MA50 and the trend line is coming. If it is an impulse expect something more bearish and more to the downside - the analysis so far. If it is a corrective move it could be wave 4(green)


Long term - waiting to see what happens in the next few months.


MARKET BREADTH INDICATORS
Market Breadth Indicators - the same for months. I have the feeling market breadth does not react to rallies... I suppose only a few shares are pulling the market.
McClellan Oscillator - around zero.
McClellan Summation Index - buy signal with divergence so far.
Weekly Stochastic of the Summation Index - pointing up.
Bullish Percentage - another high and turned lower again.
Percent of Stocks above MA50 - barely touched the overbought level and turned lower.
Fear Indicator VIX - divergences.
Advance-Decline Issues - turned lower, still with higher lows and holding the trend line.


HURST CYCLES
Day 12 for the current daily cycle.


Week 9 for the 20 week cycle.


This is the "bullish case" with shorter 20 week cycles.... it is bullish only for the short term.

Aug 25, 2018

Weekly preview

Reading comments the bulls are everywhere again, very smart again.... buy every dip, free money, 3000 at least. The same shit like January all over again, the sheeple has very short memory. The market does not work this way.
After the summer pause I am talking all the time about zig-zags , "yellow scenario" wave b etc. Below you can see the daily charts for NYSE/DJI/SP500 - all I can see is corrective waves. We can argue about w1 or w3 of ED or wave B, but I can not see an impulse. Unless we see a strong rally for iii of 3 breaking above the trend channels to prove me wrong this is just corrective crap period.
EW pattern looking close to be finished. Hitting the channel one more time with multiple divergences on the daily chart. Market breadth weak with divergences. RUT finished triangle and thrust higher for the final wave with RSI divergences daily and weekly.
The odds are higher that we are close to intermediate term top.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - expecting the trend line to be hit one more time and reversal to support and the lower trend line. MACD multiple divergences the bulls need strong move up above the upper trend line to clear the divergences.


Intermediate term - at first glance the three indexes look different SP500 strong managed to squeeze higher high and NYSE very week. If you count the waves and measure the Fibo levels you will see something different - the same pattern for all three indexes. I will dare too say they have the same pattern it is corrective and no NYSE/DJ will not catch up with SP500 as the bulls count already 3000. The opposite will happen.
Most likely the trend channel will be hit one more time with multiple RSI divergences and we will see at least a move to the lower trend line. I see corrective waves and possible patterns are wave 1 or 3 of ED and wave B which takes too long and I doubt it is part of wave 4 from the Feb.2016 low.
ED works for SP500/DJI but not for NYSE... curious what will happen in September and October.

NYSE - overlapping waves, weak angle of ascend, it looks like bearish flag. I see two zig-zags with the same size higher. Unless we see parabolic move up for iii of 3 the bulls will hold the bag again.


DJI - the same story, but stronger testing the March highs.


SP500 - the same story, the strongest testing the January high.


Long term - intermediate term high expected. It could be 4 year cycle high, but I do not think this is major top.


MARKET BREADTH INDICATORS
Market Breadth Indicators - the same weak with divergences, but holding for the moment.
McClellan Oscillator - showed strength up to the 40 level, now expecting lower highs.
McClellan Summation Index - buy signal, but lower high and divergence.
Weekly Stochastic of the Summation Index - turned higher.
Bullish Percentage - turned up, lower high so far and could not move into overbought territory.
Percent of Stocks above MA50 - several lower highs below 75. This is a sign of weakness unable to move into overbought territory.
Fear Indicator VIX - higher lows and divergences expected.
Advance-Decline Issues - lower highs, but still holding above the trend line.


HURST CYCLES
Day 7... this daily cycle looks weak so far, no strong rally and this is the way it should look like when the longer cycles are turning lower.


Week 8 of the 20 week cycle.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Countdown and combo finished on the daily chart, waiting for some bearish sign like price flip on the weekly chart.

Aug 18, 2018

Weekly preview

Last week I have explained why this reversal feels wrong and so far it failed. I see a zig-zag lower and impulse higher the price is doing the opposite if you expect a reversal.
Reversal and bearish trend should produce bearish weekly candle, that is why I wrote last week watch closely how the week develops. Usually you will see a pause for day or two (ii of 1 of C in current case) and lower for the rest of the week with bearish weekly candle. What we have is lower for three days with intraday reversal for bullish weekly candle.

The price and the indicators behave like pullback for daily cycle low. If I am right it will last another 2-3 weeks before the move up is over.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - nothing to suggest reversal zig-zag lower and impulse higher. Now we should see pullback to test the gap and MA200.


Intermediate term - MA50 was tested. The odds are higher that we will see one more higher high before a bigger decline. I see two options for this decline either 2 of ED or alternate C.


Long term - no change the indexes are nearing an intermediate term top and decline until October should follow for 18 month cycle low. I do not think we have major top... and the bottom for wave 4 is still not 100% clear. Now I prefer that the low was in April for wave 4.


MARKET BREADTH INDICATORS
Market Breadth Indicators - nothing new weak with divergences, but the McClellan Oscillator for example is spending a lot of time below zero without the price following which is usually a sign for a bottom.
McClellan Oscillator - more than a month below zero correcting and now up in positive territory.
McClellan Summation Index - accordingly weak and heading lower.
Weekly Stochastic of the Summation Index - turned lower.
Bullish Percentage - turned lower.
Percent of Stocks above MA50 - between 50 and 75.
Fear Indicator VIX - jumped sharply, I do not think that we will see 9 and staying there, rather series of higher lows.
Advance-Decline Issues - in the middle of the range holding the trend line with higher lows.


HURST CYCLES
Day 2 of the next 40 day cycle. It feels so far like daily cycle low. Sometimes the move lower is very shallow and you do not know where to put the cycle low this is even worse with the 20 week cycle. Look at closely this chart it shows you the low for the daily cycle low even if the price amplitude is missing. It says loud and clear we have daily cycle low and turn up.


Week 7 for the 20 week cycle.

Aug 11, 2018

Weekly preview

SP500 touched the upper trend line one more time and pulled back..... at first glance it looks like finished wave c/B and reversal. What bothers me DJ does not look like reversal more like b of B(the yellow scenario). RUT looks like triangle and XBI like a flat so positioning for a short term bottom and not reversal 10%. The indexes are not always in sync, but at important top/bottom they are. The daily cycle looks strong right translated and usually after that higher high follows.
What I want to say is the yellow scenario is alive so if you are short watch closely what happens next week. If we have a reversal it should be strong red week closing around the low for the week. If this does not happen it is more likely that we have b/B... or alternate 1 for ED.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the upper trend line was hit one more time and price turned lower. If wave B is finished price should drop lower whole week and close around the lows for 1/C.

DJ a little bit more clear picture - the pattern looks way too much like impulse and a-b-c. The same pattern shows RSI - it says the top for wave 5 was in July not in August(broken trend line and test of the break)followed by two legs lower.


Intermediate term - the indicators with divergences so something lower is coming... watch the price behavior next week.
Alternate scenario if the bears disappoint - one more high for the yellow scenario and more likely something else 1 of ED than B... it will take too long for B.


Long term - the indexes are nearing an intermediate term top and decline until October should follow for 18 month cycle low. I do not think we have major top... and the bottom for wave 4 is still not 100% clear.


MARKET BREADTH INDICATORS
Market Breadth Indicators - the same.... weakness and divergences. After 6 weeks 170 points rally most indicators can not move into overbought territory and some of them with divergences.
McClellan Oscillator - below zero.
McClellan Summation Index - lower high and divergence.
Weekly Stochastic of the Summation Index - in overbought territory,but no reversal.
Bullish Percentage - made a new high, but below 70.
Percent of Stocks above MA50 - lower highs below 75.
Fear Indicator VIX - a lot of complacency and sharp reversal.
Advance-Decline Issues - lower high, but still holding around the middle of the range.


HURST CYCLES
Day 30 for the 40 day cycle.... the cycle is strong right translated the odds favor another higher high.


Week 6 for the 20 week cycle.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Day 12 for a countdown, one more high is needed for the countdown to be finished.

Aug 4, 2018

Weekly preview

We have a pullback as expected.... there is a lot of discussions if it is finished or not. I am showing two variations of the B wave and now we are watching closely which one plays out.
Focus on the big picture - no matter which one plays out the next big move is lower namely 8%-10%.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - SP500 with impulse lower DJ with zig-zag.... is it wave 4 red or zig-zag b yellow? I can not give an answer with high probability. I can only say one more leg lower for the pullback will feel better.


Intermediate term - two zig-zags for wave B yellow from the weekend and wave B red with two impulses from the update.


Long term - this up leg should be nearing its end. After that we should see a sell off testing the trend line. There is a high probability that this will be the low for wave 4 from the Feb.2016 low and 18 month cycle low.


MARKET BREADTH INDICATORS
Market Breadth Indicators - no change bearish despite the 150 points rally double tops and divergences.
McClellan Oscillator - below zero.
McClellan Summation Index - pointing lower with divergence.
SP500 Weekly Stochastic of the Summation Index - heading higher for another top.
Bullish Percentage - double top.
Percent of Stocks above MA50 - two tops below 75, can not move in overbought territory - sign of weakness.
Fear Indicator VIX - complacency again I do not expect to see it at 10.
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
Day 24 of the 40 day cycle.


Week 5 of the 20 week cycle.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Count down running at 9.

Aug 1, 2018

Update

I have overlooked one possible pattern. If we see a deeper pullback bellow the support zone 2770-2790 to around MA200 than B is over and C is running. I have small short position just in case:)

Jul 28, 2018

Weekly preview

Three weeks later the pattern continue as expected - intermediate term low and higher, most likely 20 week cycle low. The only "surprise" is I thought the move lower will last another week or two before turning up.

From the low in April the move is corrective - the options are ED or wave B. SPX looks stronger because of the tech stocks and most analysis I see are ED, but this just masks the real pattern. Looking at the DAX/DJI and the indicators I think this is just wave B.
It does not matter in both cases the path is the same - pullback, another leg higher and 10% lower for 18 month cycle low in October /November.


TECHNICAL PICTURE and ELLIOTT WAVES
Short term - the upper trend line was hit one more time with MACD/RSI divergences and SPX turned lower. I think the next move is pullback to the previous high and MA50 daily around 2770-2790.


Intermediate term - most analysis I read are talking about a diagonal. There is a few variations of it and I am showing the one if you count a triangle. I do not believe it, but again the path is the same even if this is B wave so I do not care much. I think it is wave B(see the chart below).

This is DJ line chart which shows more clear what is going on. The indicators confirm this pattern.
The chart shows clear a-b-c/A from the January top and RSI/MACD confirm it - two legs lower. Then you have two zig-zags higher for a/B again the indicators are saying you have one leg higher from the early April low - no interruption in the middle for triangle. Sharp sell off b/B most likely 20 week cycle low which explains the strength higher. Now we need one more zig-zag c=a/B for complete pattern.
For the SP500 tech stocks strength is masking it, but it is the same.... even for NDX I will not be surprised to see a pullback and another high for finished B wave to surprise most traders which are counting flat wave IV and now finished impulse wave V with major top.


Long term - we are seeing "at least one more high" which I am talking about for months.... if we are lucky this is wave B with C and 5/V to follow. For traders this will be the perfect scenario - great moves to trades much better than diagonal.


MARKET BREADTH INDICATORS
Market Breadth Indicators - do not show a lot of strength, rather we have some divergences despite the strong rally.
McClellan Oscillator - below zero.
McClellan Summation Index - second top with divergence so far.
Weekly Stochastic of the Summation Index - heading higher for an intermediate term high in several weeks.
Bullish Percentage - second top at the same level despite 150 points rally.
Percent of Stocks above MA50 - second top divergence so far.
Fear Indicator VIX - divergences are building.
Advance-Decline Issues - in the middle of the range.


HURST CYCLES
Day 19 from the 40 day cycle. Pullback for mid-cycle low expected. I have adjusted the daily cycles because of the shorter 20 week cycle.


Week 4 of the next 20 week cycle. I think we have 20 week cycle low at the end of June.


Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Finished setup and countdown running at 7.