Jan 9, 2018

Update

UPDATE: I see five waves for the week and five waves from the low in the end December with divergences on the hourly chart, so something lower is expected. I can not say if this is the top or another pullback wave 4, but I do not think the indexes will reverse and plunge before the end of the month. If it is the top we will see an impulse lower and deep retracement, if not another pullback and higher high with divergences on the daily chart.



I was playing with the charts searching for a way to extend the impulse higher... it looks a little bit crazy with nested 1-2 i-ii (i)-(ii), but the bull is strong enough it can handle 50 points higher:)
After a pullback if we see another higher high I have to switch to this count. The Fibo extensions look very good so after all may be itis not so crazy.
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18 comments:

  1. AnonymousJan 9, 2018, 5:29:00 PM

    In this sense, VIX or UVXY would have a lot of downside move to go?

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    1. KrasiJan 9, 2018, 8:19:00 PM

      I do not think VIX or UVXY would move much lower.

      P.S. there is no guarantee that the scenario above will play out.
      This is a backup plan if we do not see a reversal.

      Delete
  2. AnonymousJan 10, 2018, 3:55:00 PM

    Thanks for the P.S. Just wondering the target for VIX or UVXY? still 30% or above 12?

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    1. KrasiJan 10, 2018, 4:12:00 PM

      I do not know a way to measure how high UVXY will move it is not like other ETFs. I can only compare. Statistics with similar moves in 2016 and 2017 is shown below. If history repeats normal correction 3%-5% should cause UVXY moving higher around 50%.

      Date VIX XIV UVXY
      sep.2016 11->20 -25% +56%
      nov.2016 12->23 -21% +58%
      apr.2017 10->15 -17% +42%
      aug.2017 9->16 -26% +62%

      Delete
    2. AnonymousJan 10, 2018, 7:16:00 PM

      You can roughly measure VXX/UVXY target using XIV, VXX target ~= -1 * XIV pattern target, UVXY ~= -2*XIV pattern target. Please also take daily compounding into consideration (all above ETNs track daily moves of underlying) and the VIX ETNs do not track VIX index but VIX FUTURES index (see prospectus) and they use 1M/2M VIX futures contracts to track underlying index

      Best Regards

      Mily

      Delete
  3. AnonymousJan 11, 2018, 5:40:00 PM

    This market is remarkable in its bullishness. Investor sentiment at all time high for bullishness!

    Kali

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    1. KrasiJan 11, 2018, 7:58:00 PM

      It is normal in the last wave in bull market(from 2009) to see such mania.... but this time it is really breaking record after record. This is usually not so good the more you stretch the rubber band the stronger it will snap back.

      Delete
  4. CTHueyJan 11, 2018, 6:57:00 PM

    I'm noticing progressively lower volume on the SPY etf, wondering if this could be signs of exhaustion. Also saw an article that noted the largest inflows thus far in 2018 were from retail investors, while institutional investors had net outflows. I'm curious to see what happens as banks start reporting tomorrow as their earnings will be muddied by one time write downs. I'm looking for a catalyst for a pullback and it has yet to manifest. Maybe another selloff in sovereign debt? NAFTA? Any thoughts?

    CT

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    1. KrasiJan 11, 2018, 8:49:00 PM

      Yes, progressively lower volume says less buyers... I have read somewhere that we have 2-3 days of selling on strength for SPY despite the vertical move. I think big money is using the rally to unload shares.
      XLF have more clear pattern and should turn lower for a pullback. You do not need an event for a reversal. Usually a top/bottom just occur and people look for explanation.
      My explanation - bonds(TLT) looks like ready with the triangle, PM reversed already and money moving from risk on to risk off trades.

      Delete
    2. CTHueyJan 12, 2018, 3:30:00 PM

      Thanks you. I've been an avid follower of you blog for about a year now. Really appreciate the attention you give the page and the great analysis you provide.

      Delete
  5. AnonymousJan 11, 2018, 7:00:00 PM

    Seems like yesterday's 20 pt pullback was as you flagged and now we could be headed for your fib extension around 2785. Your chart shows the extension around 2765/70...can't work out why though ...?

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    1. KrasiJan 11, 2018, 8:29:00 PM

      The Fibo measurements are just roughly estimates they are not perfect. For example iv could retrace 38% instead of 23,6% as shown on the chart.... I do not expect the count to work perfect if at all.

      Delete
    2. AnonymousJan 12, 2018, 4:47:00 AM

      Curious. This soxx with gap lower appears very bearish to me.

      Also xbi looks to have completed 5 wave up from recent low on daily?

      Any thoughts?

      Kali

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    3. KrasiJan 12, 2018, 7:36:00 AM

      XBI - looks like heading for intermediate term top. On the hourly chart the last move up looks like a-b-c so it is more likely to see ED for 5 for another 2 weeks.
      SOX - the same like last time, the impulse lower has not been invalidated, but still it posible to see iv-v 4-5. Major components like INTC and TXN hit their intermediate term top, but NVDA made higher high... so it is 50/50 until we see a overlap at 1291 or higher high.

      Delete
    4. AnonymousJan 12, 2018, 6:41:00 PM

      Thanks Krasi,

      Really appreciate it.

      Kali

      Delete
  6. louis lombardiJan 12, 2018, 1:15:00 PM

    Krasi your thoughts on uvxy thanks

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    1. KrasiJan 12, 2018, 2:02:00 PM

      Looking at XIV I do not know how to extend the move up, it looks tired. VIX is up in the last 6 trading session.... all I can see is move up for UVXY.
      Some indexes look ready to the upside, some need another week or two.... so I suspect UVXY will test the low late January before really takes off.

      Delete
    2. louis lombardiJan 12, 2018, 6:47:00 PM

      Thanks for your thoughts

      Delete

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